Study Of FDI Effect Of Developing Countries In Regional Economic Integration

Over the last decade, the universal trend of the development of regional economic integration is that no matter what kind of economic integration organization it is, established or newly-built, their cooperation has gone far beyond the field of trade, tried to search for more extensive cooperation in other fields, especially in the field of foreign direct investment. We can see that, the importance of FDI is to the economic development of the member countries as well as the region as a whole has aroused more and more attention. The most integration of regional economics FDI theory based on developed country, though they could not explain developing country FDI effect exactly. So it is the point of this thesis that improves developing countries FDI theory in regional economics integration by investigating the developing country FDI effect in all kinds of integrations of regional economics, and explores the optimum route that promotes developing countries FDI effect.On the basis of reviews over some related articles on the topic of regional economic integration's influence of on FDI effect and competition advantage theory .We have carried on overall and deep analysis from two aspects, different motives of multinational corporation's foreign direct investment and influence the decisive factor angles of the trans-corporation FDI from host country. In the section of empirical analysis, we choose two of the most famous regional economic integration organization, namely North American Free Trade Area (NAFTA) and China—ASEAN Free Trade Area (CAFTA) as example. We investigate FDI effect of developing members : Mexico,the main members of ASEAN and China in NAFTA and CAFTA. Through summing up to analysis result, we think that it is very important for developing countries improve FDI effect to choose suitable member or partner to participate in the integration organization of the regional economy. According to the choice criterion of "competition advantage ", the high-level products difference type competition advantage not only can bring the higher income, it is very difficult to be imitated by the rival. So, developing countries should choose the partners who can develop their products difference competition advantage.China is a typical big developing country, if we want to optimize the integration of regional economics FDI effect, should choose the partner who can form competitive complementary economic structure with us, too. Finally, puts forward some relevant policy and recommendations to improve the utilize quality and level of FDI.