Empirical Analysis Of Determinants Of FDI In Services

In resent years, with the globalization of economy and the liberalization of investment, the pace of the global industrial restructuring has been sped up. Countries gradually relax the control of the service sector, vigorously develop it and make it became the main body of the national economy, which causes the world industry shifting to the service sector. Nowadays, the service sector weights more than manufacturing and becomes the focus of the foreign direct investment.Many home and abroad researches show that the level of FDI utilization of service industry has a positive effect on the development of Services. Although the service sector of China has a late start and is still at the initial stage now, it develops rapidly and has a large increasing space. So China should seize the opportunity of international industrial restructuring, actively absorb and make full use of FDI in Services to stimulate the growth of the economy. Shandong province, as the second economic province, has a rapid development in agriculture and manufacturing, but the level of its service industry belows the average of the nation. Especially its FDI level of Services, has a large gap with other domestic provinces. Therefore, it's significant to study on the determinants of FDI in Shandong's Services and do research on the efficient methods of attracting more FDI in order to improve Shandong's industrial structure and promote economy.The data is from 1989 to 2008. Based on the theoretical framework, we get the empirical results that integrated factors as well as individual factors have different influence on FDI utilization of Services, and this also happens according to different length of time.This thesis consists of five parts.The fist part is the introductory remarks. It elaborates the background and significance of the issue, basic ideas, framework structure, main views and the innovations as well as writing difficulties.The second part firstly illuminates the theories of Services'FDI from developed as well as developing countries respectively, and then do the review of the literatures about determinants of service industry FDI from national side and provincial side. Finally, it summarizes the determinants of FDI in service industry.The third part explains the meaning of Services and defines the scope that service sector covers in this article. It analyzes status quo of FDI utilization in Shandong Services and identifies the gap among Shandong province and other domestic provinces.The forth part is the analysis of the determinants of FDI in Shandong service sector. Firstly, this part builds a theory framework which consists of economy factor, cost factor, and policy factor. Secondly, it uses several empirical methods to test the main factors which influence FDI in Shandong Services. Finally, we get the result that infrastructure, human resources and the agglomeration of Services have a positive effect on FDI in Services, while the potential of industry and government factor have a negative correlation with FDI in service sector.The fifth part gives some policy suggestions and countermeasures on how to enhance the level of attracting FDI for Shandong service industry.