The Comparative Study Of Crowding-in And Crowding-out Effect Of FDI In FuJian And JiangSu Provinces

For three decades of reform and opening up, a lot of foreign direct investment flow into China, they made great contributions to China's economic and social development and promoted an important force in China's economic growth. However, FDI is a double-edged sword, in driving economic growth, while also showing some adverse effects. Thus, in recent years, domestic and foreign scholars who focus on the impact of FDI on China's economic, they turn their study form concern over FDI in economic growth, technological spillover effects of FDI on China extends to the effects of capital formation, which focuses on FDI in the macro is promotion or discourage domestic investment. FDI crowding-in or crowding-out domestic investment, now is a hot topic in the academic community and the community.Fujian Province and Jiangsu Province are both the big provinces in the introduction of FDI, FDI in the two provinces has made important contributions to economic development, but also there are some adverse effects, such as FDI crowding-out domestic investment. Comparative study found that geographic location, the state's foreign policy in the region and so on are so similar in the two provinces that the effects of FDI has shown the different on domestic investment. In this paper, by build absolute crowding-in crowding-out effect model, use measurement methods regression two provinces data, found that FDI have a significant crowding-out effect on Jiangsu Province domestic investment, while the FDI investment in Fujian Province showed a significant crowding-in effect. How to treat the differences situation in the two provinces? How to get more inspiration with practical significance? These are the concerns of this article.This paper first reviews the study of the status quo of the domestic and foreign scholars on the issue of FDI crowding-in and crowding-out effect on domestic investment, lay the theoretical basis of this study.Then, we will analysis total amount of FDI in two provinces, sources of FDI in two provinces, the industry structure of FDI distribution in two provinces, geographical distribution of FDI and use of FDI performance in two provinces five sides compare the status of the two provinces use of FDI. Next, this paper will use Wang Zhipeng and Li Zinai's absolute crowding-in crowding-out effect model, use measurement methods regression two provinces data,and get FDI had a crowding-out effect on domestic investment in Jiangsu Province, while the FDI investment in Fujian Province had a crowding-in effect. In this paper, we focus on Jiangsu Province analysis the effect produced by FDI, and focus on Fujian Province analysis the effect produced by FDI, finally article based on comparative and empirical analysis results from the provinces of both similarities and differences and give some recommendation in policy.