Foreign Direct Investment And Industrial Agglomeration Mutual Influence

This thesis calculates the conglomerate degree of 21 industries in 39 Guangdong cities and builds a model to explain the locations of FDI in Guangdong through theories in industry conglomerate and FDI fields. After serious analysis, it is pointed out that Guangdong province can seek new ways for industry upgrade and transfer through FDI and industrial conglomeration.The research clue is that based on FDI theories and literatures, it is argued that FDI and industry conglomeration affect each other positively. And a theoretical model about FDI location selection within Guangdong is built to analyze effect of industrial conglomeration on FDI location. Finally we get the conclusion that we can use FDI and industrial conglomeration to help Guangdong industries realize upgrade and transfer.The following conclusions are reached:the 39 industries in Guangdong have relatively low degrees of but a strong trend towards conglomeration, with manufacturing industry the most. FDI has contributed a lot to industrial conglomeration through capital conglomeration, information overspill, technology overspill and market demand. Many factors, together with industry conglomeration, have affected the location of FDI. The model shows that industry conglomeration is the most important factor while real estate price, openness and distance to home country also have different effects. Empirical study shows that salary has a relatively insignificant effect on FDI, which is inconsistent with theoretical research. This problem is discussed in detail.