Analysis Of Relationship Between Regional Factors And The Spillover Effect Of Foreign Group Investment

Foreign direct investment is an important way of flow of funds between countries, it can promote economic development in both home and host countries. Currently, most foreign investment in China located in Economic and Technological Development Zone, shows a clear characteristics of group investment. These FDI which gather in the space and have industrial cooperation between these industrial clusters, we call them FGI.From the theoretical point of view, the entry of FGI will bring spillovers to the host country, however, in recent years, more and more scholars using data from China to make empirical analysis find a negative spillover effects. In order of exploring the impact factors of spillover FGI, and find out the relationship between each factor and spillover effects, this paper will select fifty-one cities in Jiangsu Province, to sort the data according to the level of each factor, then, make regression analysis using group data. At last, In order to make better use of foreign capital and put forward more practical policy recommendations, we will chose two largest economic and Technological Development Zone in Jiangsu Province for comparative analysis.Regression results show that the relationship between spillover effect and Infrastructure,technology level,the degree of opening to the outside world are all not significant. The proportion of foreign investment in small groups show not significantly, in intermediate group spillover effect is positive, but in larger groups, spillover effect becomes negative. We can learn that the proportion of foreign investment is not the higher the better, only the appropriate scale of the foreign capital can increase foreign capital enterprise overflow. There are threshold effect between the level of human capital and foreign overflow effect, only to have a certain level of human capital in order to obtain positive spillover. By comparing and analyzing Suzhou Industrial Park and Kunshan economic and Technological Development Zone, we find only introduce appropriate foreign capital can prove the development of local enterprises. The high-tech enterprise is not necessarily to benefit the development of local enterprise, only if local enterprises have enough technology ability to absorb the spillover effect.