The Analysis Of Crowding-in And Crowding-out Effects Of FDI In Hebei Province

With the wave of economic integration, more and more multinationals chose to invest in overseas, international capital began to flow freely between countries, foreign direct investment (FDI) became a major way of multinational corporations invest on overseas.After FDI entered the host country, it had brought the funds, technology and scientific management experience for the host, it promoted the improvement of host country. However, with the continuous inflow of FDI, some of the negative influences were gradually highlight out. To solve this problem, domestic and foreign scholars have done a lot of empirical research, trying to come to the conclusion whether the FDI crowd in the domestic investment or crowd out domestic investment? But the conclusions were different.Based on the domestic and foreign relevant theory as a foundation, the essay researches the crowing-in & crowing-out effects in Hebei Province. Firstly, it carried out a comprehensive analyzes of the number of FDI, the sources of FDI, the distribution of FDI in different areas and different industries, and the patterns of investment. Second, in the different levels the essay deeply studied the mechanism about how the FDI affects domestic investment, and the most important to highlight the mechanism of Hebei Province. According to the history of Hebei Province attracted FDI since reform and opening up, the essay analyses the objective factors of FDI in Hebei, at last draw the conclusion that the degree of both crowding-In effect of crowding-out effect of FDI were change comparatively. Third, the essay made the use of the correct empirical model, analysed 1986-2008, 1986-1996, 1997-2008, the three different periods of FDI data of Hebei Province. The regression results showed that during 1986-2008, the crowding-in effect coefficient of FDI in Hebei province was 10.33, the other periods of 1986-1996 and 1997-2008 the coefficient were 5.35 and 6.67. Combining the economy of Hebei province at present, the essay gave a comprehensive analysis of the different coefficients, at last came to the conclusion that in Hebei Province the market mechanism of FDI of the crowding-out effect was gradually strengthening. Finally, according to the economic situation of Hebei at present, the essay proposed to the policies strengthen crowding-in effect, weaken the crowding-out effect.