The Research Of The Interactive Relationship Between FDI In Service Industry And Service Industry Agglomeration

As the development of service industry internationalization, more and more Foreign Direct Investment (FDI) being invested in the service industry has become an indisputable fact. FDI of both developed and developing counties, without exception, all turn to invest in the service industry. After China's accession to WTO, in accordance with the WTO commitments, the majority of service sectors started opening to the outside world.As the result, finance and insurance, telecommunications, logistics industry as well as legal, computer, project management, consultative service and many other service sectors have become popular areas that attract more and more foreign direct investments. Following successfully undertaking foreign direct investments in manufacturing industry, China starts to become an important inflow country of foreign direct investments in service industry.In the real economy life, as one of the important vector of the economic globalization, foreign direct investment companies, not only take part in the innovation and development of the cluster zone, but also be the link of the economic globalization and the cluster zone by building a bridge to connecting the cluster zone and the outside world. The service foreign direct investment enterprises reach into different regions during implementing its globalization strategies. They invest in the local area and attract other enterprises related to their own to move in and take root at the area. In the meantime, they promote the formation, improvement and development of the local service industry agglomeration; Foreign capital entering the area not only can make the competitiveness of the service industry agglomeration district enhanced, but also can establish crucial conditions for the formation of the self-organization of the industry agglomeration, the development of scale of economy and the innovation of the cluster district.However, the area distribution of the FDI in service sectors is unbalanced, showing a geographical concentration. There are many factors of different aspects generating impact on the location choice of the service foreign investment enterprises, one of which is industry agglomeration being able to improve the competitiveness among foreign investment enterprises. With the strategies of service foreign investment enterprises changing, considering of the demands of resources optimizing allocation, innovation, expanding the market, promoting specialization and lowering the transaction cost, service industry agglomeration district has gradually played a more and more important role in service foreign direct investment enterprises selecting location area.Therefore, dynamically analyzing, foreign direct investment in service industry plays a crucial role in the formation and development of service industry agglomeration. While service industry agglomeration can generate positive impacts on the companies in the district by expanding its scale and influence power, and furthermore attract more foreign enterprises of the same and relevant industries to enter the district. As a result, there becomes a sound cycle between foreign direct investment in service industry and service industry agglomeration.In this paper, the author used the relevant data of various service industries and provinces of our country to prove the interactive relationship between foreign direct investment in service industry and service industry agglomeration by quantitative analysis. According to Granger theorem, it is empirically proved that there is a stable and long-term equilibrium relationship between foreign direct investment in service industry and service industry agglomeration, meanwhile service industry agglomeration has a positive impact on the growth of foreign direct investment in service industry, regardless of long-term or short-term.Therefore, there are several policy enlightenments given according to the conclusion: the structure of the service industry should be adjusted and the pace of opening up service sectors should be accelerated; the local government should play as a facilitator, a catalyst and a system builder in the formation of service industry agglomeration and pay special attention to the cultivation between the local service enterprises and foreign direct investment enterprises.