Industrial Agglomeration Of Shanghai Auto Industry The Impact Analysis Of Location Selection Of Fdi

Industrial Clustering plays a very important role in the FDI location choice. There are many factors influencing the foreign companies’investments, and whether or not the regions they choose have the basic conditions of industrial clustering is the most important factor they should consider, especially the automobile industry. Because of the long production chain, the large cost of the infrastructure, and the high technology of the automobile industry, the foreign companies tend to choose the regions where exist the industrial clustering already.Automobile industry is the economic lifeblood of Shanghai and the FDI has a very important influence on the development of the automobile industry. So this paper takes Shanghai automobile industry as an example, introduce the industrial clustering into the analysis of the automobile industry, mainly research from theory and demonstration, and finally want to find the association between the industrial clustering and the FDI location choice.In the theoretical research, we discuss the two industry clustering externalities:pecuniary externalities and technological externalities, and then analyse the influence on the FDI location choice from the two externalities. In the empirical research, we find out the relationship between the automotive industry clustering in Shanghai throughout the multiple linear regression method and the find the most influential factor. Finally, we according to the research results, we give some pertinent suggestions to the automobile industry of Shanghai on how to attract the FDI.