Western Region Of Foreign Direct Investment And Industrial Agglomeration Relationship Studies

Since the1980s, foreign direct investment (FDI) began largely to inflow into china,it not only enhance the regional industrial competitiveness, but also improve theregional capacity for sustainable development. In the1990s, foreign direct investmenthad become the main form of utilization of foreign investment in China; scholars areincreasingly concerned about the impact of FDI on China's economy. China's industrialagglomeration phenomenon is increasingly evident, the size and number of industrialagglomeration are gradually played an important role in promoting regional economicdevelopment. So far, many studies had explored the impact of FDI on China's industrialagglomeration,but few explore the relationship of the two-way interaction between FDIand industrial agglomeration,and even less researches on the interaction of Western FDIand industrial agglomeration, so the study of the interaction between industrialagglomeration and foreign direct investment, in particular, the mutual relation of thewestern regions, has important theoretical and practical significance for more effectiveutilization of foreign investment and developing the local economy.The paper uses14industries' panel data in the western11provinces of9years,combining theoretical analysis and empirical research, comparatively analysis andsummarized the interaction between FDI and industrial clustering of western regionfrom different perspectives. The article is divided into five parts. The first part is theIntroduction; mainly propose the question, present the theoretical and practicalsignificance, research methods of the paper as well as innovation of the paper andinadequacies. The second part is the literature review, mainly from the industrialagglomeration on the role of the choice of FDI regional impact and FDI on the role ofindustrial agglomeration summarized the ideas of domestic and foreign scholars, andconduct theoretical analysis and literature review. The third part is the analysis section.It analyze the situation of foreign direct investment and industrial clustering inwestern11provinces,and mainly focus on the advantages of representative industries inthe western region, pointing out the potential problems and the possible links of them.The fourth part is the empirical part, in this section we use econometric methods and theunderlying theory, combining with the nine years (2001-2009)panel data of14typicalindustries in the western11provinces, and establish an empirical individual fixedeffects regression model by Eviews software to analysis interrelationship between foreign direct investment and agglomeration in western region, estimating the datastationarity and correlation by unit root test, cointegration test and Granger causalitytest,. The fifth part is conclusions and recommendations, we obtain the conclusionsthrough previous theoretical analysis and empirical analysis, there are short term andlong-term two-way interaction between foreign direct investment and agglomeration inthe western region, and finally we propose some positive recommendations.