The Effect Of The FDI Regional Differences On Manufacturing Competitiveness

only the regional economic development level is different, but also, the distribution of FDI and the development of manufacturing competitiveness turn out to be unbalanced. Regarding the FDI position choice, the location theory and compromise theory of international production have carried on the good elaborations to it, which shows that there is a certain theoretical foundation for the differences in regional distribution of FDI. The long-term studies of FDI show that the technology spillover effect of FDI exists in the industries of the host country, which could promote the development of related industries. Though there is a certain path dependence of manufacturing competitiveness which means the historical development of manufacturing industry may affects the current competitiveness of it, the research focuses on manufacturing competitiveness shows that it is significantly affected by the technology spillover, So it's of great theoretical and practical significance for the government's regional guidance on FDI and speeding up the development of manufacturing industry to understand and grasp the impact of the regional distribution of FDI and the regional differences on manufacturing competitiveness.This paper firstly carries on a review of related literatures about three parts, which are FDI regional differences, industry competitiveness, and the relationships between them. On the basis of literature review, this paper gives the elaborations to the theoretical foundations which are location theory and compromise theory of international production in the beginning, and then China is a broad country, and in its long-term development process, not conclude the influencing factors of FDI location choice. After that, the related theories about industry competitiveness are elaborated such as the classical and modern competition theory, the theory of international industry competitiveness. At last, the theories relative to the FDI technology spillover effect are introduced in order to explain the mechanism of the effect of FDI regional difference on industry competitiveness.In order to understand the effects above, the author carefully selects the measurement indicators of FDI regional difference and manufacturing competitiveness, also, the country is divided into six regions which are Bohai Rim, southeastern, southwestern, eastern, central and northwestern regions. On this basis, the panel data model is applied to the effect of FDI regional difference on manufacturing competitiveness on the empirical analysis. Also in this process, the six regions are being classified with the standard of the manufacturing competitiveness strength, and the effect is further analyzed. The results shows that the change of FDI regional difference has a negative effect on manufacturing competitiveness, and in different regions, the effects turn out to be different, which means in the regions with high competitiveness, the effect turns to be little, while in the regions with low competitiveness the effect turns to be wide.At last, the paper summarizes the main conclusions, analyzes the real economic reasons of the effect, and gives some policy recommendations about FDI introduction and manufacturing development.