The Influencing Factors Of FDI Region Selection

With the rapid increase of foreign direct investment(FDI) in China since its reform and opening up,the scale of FDI in China has become one of the world's largest. The inflow of foreign investment, playing a significant role in the growth of Chinese economy, has effectively promoted China's social development and the institutional transformation. However, the regional variance of FDI in China is evident, not only because the reform and opening up process in China is carried out region by region, but there have been influencing environmental elements. The FDI utilization in Liaoning Province takes up 60% of the overall FDI in the Northeast Three Provinces, while the sum of FDI utilization in the rest two provinces(Jilin and Heilongjiang Province) takes up 40%. As far as the northeast region is concerned, the FDI is further clustering in regions surrounding Bohai Sea, and the trend is intensifying.This thesis analyses the regional variance of FDI and the influencing factors from both qualitative and quantitative perspectives. From the qualitative perspective, foreign investors, before deciding the location of investment, need to consider the investment environment including factors such as the investment location, cost, market and policy. On the basis of qualitative analysis, the thesis analyses the impact degree of these influencing factors on the decision making of FDI. Current FDI is considered as explained variable, while GDP, population, urbanization level, international tourist quantity, gross import and export volume, dependence on foreign trade, open traffic logistics mileage, average employee wage, current student quantity in colleges and universities, verified patent quantity and FDI retained in prior period are considered as explaining variable, the research details are as follows:Chapter One Introduction. Putting forward the question and illustrating the research background, objective and significance, setting forth the train of thoughts, research method and theoretical fragment of the thesis.Chapter Two Literature Review. Because the region research of FDI involves FDI theories and its location theories, this chapter first reviews the relative FDI theories and FDI location theories, and then summarizes the existing FDI location research theories in recent years from the following three perspectives: the first is location selection and research of FDI, the second is the analysis of factors influencing the FDI location selection, the third is the empirical research of location decision of FDI in China.Chapter Three Aimed at providing actual evidence for succeeding reason analysis, this chapter analyses the distribution and features of FDI location in the northeast three provinces, mainly analysing and illustrating the development history and location distribution of FDI in China. The distribution and features of FDI location being the major subject for analysis in this chapter, they are analysed from the following five perspectives: First, the scale of FDI in Northeast China; Second, the method difference of FDI; Third, the distribution of FDI in the northeast three provinces; Four, the source location of FDI; Five, the industry distribution difference of FDI.Chapter Four The theoretical illustration of influencing factors on FDI location difference. This chapter analyses the location, economy development level, market potential, industry, cost, degree of market openness, human capital, technology and policy in the northeast three provinces, and constructed the theoretical analysis frame basing on the analysis results. Chapter Five Empirical research. According to the theoretical analysis of Chapter Four, this chapter selects of all influencing quantifiable elements and performs regression analysis step by step, utilizing SPSS software to check whether these factors have impact on FDI attraction and found the important intensity of each factor's impact on location selection of FDI in the northeast three provinces.Chapter Six Policy advice. This Chapter explains the obstacles of attracting foreign investment in the northeast three provinces according to the analysis results of the previous chapters, and provides policy advice for improving investment environment and facilitating the balanced development of FDI in northeast China.