Research On The Influence Of Industrial Clustering On The Location Choice Of FDI In Automobile Industry

Industrial Clustering is one of the important influencing factors that affect the Location Choice of FDI (Foreign Direct Investment).The key reason why a foreign company choose a region to invest is that the region have the basic conditions——Industrial Clustering ,especially in the Automobile Industry. Because of the specificity of the Automobile Industry: the long chain of production,the high technology,the large cost of the infrastructure construction and so on,a foreign company tend to choose the area with Industrial Clustering to invest.In this paper,firstly we analyze the theory of the Industrial Clustering and the FDI Location Choice,and then discuss how the Industrial Clustering influence the FDI Location Choice in the Automotive Industry. Because of the specificity of the Automobile Industry, it is four effects of Industrial Clustering that influence the FDI Location Choice. They are the effect of Transaction Cost,the Economies effect of Scale,the Economic effect of Scope and the effect of Knowledge spillover. The four effects reduce the costs of company, improve the competitiveness of enterprises, and then attract the foreign company from the to invest in the region.In China,the FDI of Automobile Industry mainly concentrate in six areas. And the Automobile Industry in China also assemble in these six areas. So what is the relationship between the Automobile Industry Clustering and the FDI Location Choice. According to the analysis of the Automobile Industry Clustering Effect and FDI amount in six areas, we know that the scale of production and the knowledge spillovers are closely related to FDI amount.Finally, This article holds that the sound of China's automobile industry is the primary means of gathering: the expansion of scale and strengthen the auto industry knowledge spillovers, thereby better attract foreign direct investment.