The Upper Yangtze River Region Industrial Agglomeration Effects On Fdi

With the economic advancement and the process of the police that the reform andopen to the outside world goes continually deepen, the activities of foreign directinvestment in China becomes more and more frequents with bigger scale and involvingwider. That has a great impact on the China’s economy. However, as a result of thecomparatively backward economic development, foreign direct investment in the upperreaches of the Yangtze River is weakening. How to attract foreign direct investment topromote economic development becomes the focus of scholars’ and the government’sattention. We can see most foreign direct investment flowing into the industry, whichbecause of the great output and mature development. Except that, industry clusterdegree has an apparent impact on the foreign direct investment.The location choice towards FDI is analyzed from the perspective of the industrycluster in the upper Yangtze River in this paper. This article uses the economics of theregional location theory, Industry Cluster theory FDI theory as theory supports andsummarizes other academics’ analyses to draw lessens. This article choose the indexeswhich can reflect the degree of On the choice of the variables and then by building thepanel data with the multiple regression model to analysis the relationship between theindustrial cluster and the choice of foreign direct investment in upper Yangtze riverprovinces.Meanwhile, considered that Chongqing is the strategic highland of reform andopening up in inland, this article laid stress on Chongqing’s industry agglomeration andforeign direct investment as a representative of the upper Yangtze River provinces.Through to calculate Chongqing industry location entropy, this article analyzesChongqing industry cluster process and its change and through to describe theChongqing foreign direct investment processes to reflect the development level of FDI.Then this article analysis the relationship between the location choice towards FDI andthe industry agglomeration through building the time series analysis, co integration testand Granger causality test.Through the qualitative analysis and quantitative analysis, on the one hand we cansee because that FDI is at the low starting point and developing slowly, FDI has littleimpact to the formation of industrial cluster, and due to the weaken science andtechnology innovation, that also can’t attract FDI inflowing in the upper Yangtze River.On the other hand, we also can see industrial cluster in the upper Yangtze river haveobvious effect to the location choice towards FDI.At the end of this article, combining the upper Yangtze River industrialagglomeration situation, some suggestions are made to attract FDI.