Cultural Difference、Geographic Distance And The Main Source Countries’ Spatial Pattern Of FDI In China

With the continuous deepening of global economic integration, internationalcapital flows have become increasingly frequent. As the world’s largest developingcountry, China has attracted multitude foreign direct investment (FDI) from othercountries and districts.But as the investment scale expanding, FDI distribution ofcountries imbalances within China’s different regions is increasingly obvious,that is tosay, China’s FDI spatial pattern (location choice of the source country within China)exists serious instability, it means that there exists a great different in the choices ofFDI location within China among the original countries and districts of investment.China is one of the four ancient civilizations and it has its own cultural traditions, sothere is a big difference on the humanist values,and what’s more, China’s region isvast,the provinces within it are also very different from other countries in the world ingeography, so the analysis of the effect of culture difference and geographicaldistance on each country’s FDI spatial pattern in China would be significance incoordinating the economic development of the regions in China.In view of this,this paper collected the data of36countries’ FDI in China’sprovinces between2001-2010, and especially made a systematic analysis about theeffect of culture difference and geographical distance on each country’s FDI spatialpattern in China. First of all, we focus on six representative countries and regions andanalyze the dynamics evolution of the six countries and regions in the spatial patternof China’s FDI using exploratory spatial data analysis and found that differentcountries and regions’ FDI in China reduce from east to west, but there are significantdifferences in the features, such as spatial correlation and so on, and the differenceshave a strong correlation to the factor of human geography. Secondly, this paperespecially build a FDI game model on the perspective of human geography,systematically proved the influence of culture difference and geographic distance onthe choice of FDI location and the regional investment, thus we theoreticallyexplained that culture difference and geographical distance affect the choice of FDIspatial location. Thirdly, a gravity model with FDI space lag factor considered isconstructed to empirically analyze the difference in culture between China’s provincesand the source countries, the effect of geographical factors of China’s provinces andthe source countries on each country and region’s FDI investment in China’s provinces.The study found that the countries’ real direct investments in China have obvious path dependence and combined effect on spatial pattern, while, the culture differencebetween China’s provinces and other countries and the FDI overall average level ofthe countries in China’s provinces have an obvious S-type relationship, that is tosay,when culture distance is smaller, the correlation of culture distance and thecountries’ FDI in China’s provinces is negative; when culture distance is at the middlelevel, the greater the culture difference between the country and China, the more itwould promote the FDI of this country in China’s provinces; when culture distance isgreat, the greater the culture difference between the country and China, the more itwould restrict the FDI of this country in China’s provinces. While, the influence ofgeographical distance on countries’ FDI in China’s provinces showed an obvious signof debating, but the advantage of waterfront provinces in absorbing the countries’ FDIis still enhanced.At last, the results of the analysis are summarized and the paper gavepolitical suggestions on how the three regions in China to attract investment balancelyand coordinately.