A Research On The Influence Of Foreign Direct Investment On Agglomeration Structure In Chinese Service Industry

With the development of economic globalization and the acceleration of opening to outside world in service industry, FDI, Foreign Direct Investment, has already flowed to service industry from manufacturing. The scale of FDI in service industry increases year after year. The inflow of foreign capital has dramatically boosted the development of service industry in China. It gradually appears service cluster, whose specialization level is high and who owns international service concept in some well developed eastern cities. The enterprise cluster in these service clusters could provide overall systematical service for clients in the world wide, which promote the service industry’s international competitiveness in China.Although the inflow of FDI in China’s service industry is increasing year after year and the development of service industry cluster is fast, but the service industry cluster structure is poorer, the big difference between different industries agglomeration, low degree within the industry agglomeration and regional difference of the service industry cluster are remain big problems. Generally, in the process of the foreign direct investment in the implementation of the strategy of globalization, when they are investing in the local, they also attract their related enterprise from the outside to the local roots and promote the formation of local industrial cluster. The access of foreign capital can improve the industry competitiveness in service industry cluster, boost the scale effect of industry agglomeration and promote regional service industry cluster to develop harmoniously. Therefore, from the point of view of dynamic analysis, with a certain conditions, FDI could promote the formation and development in services convergent. Foreign capital has brought capital elements centralization, expanded the size of the industry cluster, promoted the professional specialization and improved the quality of workers, then can affect different industrial agglomeration level, improve degree within the industry agglomeration and affect regional agglomeration level of the service industry cluster. The rational use of foreign can optimize Chinese service industry cluster structure. When FDI promotes services convergent structure optimization, it also enhances the international competitiveness of China’s service industries, and improves the scale effect in service industry, and then promotes the economic growth.This paper empirically researches the influences of FDI on the cluster structure of China’s services using ganger causality test. According to the co-integration analysis of the relationship of total services FDI and each industry, as well as the relationship of total services FDI and regional cluster of China’s service industries, and using granger causality test and error correction model, this paper draws the conclusion as follows. There exists certain stability of the equilibrium between Service FDI and the service industry concentration including various industries and different regions. What is more, FDI is the granger reason of service cluster. It has some positive effects on cluster degree in service and also has some influences on cluster structure.So, influences of FDI on the structure of the service industry bring us revelation:the goal of optimizing service cluster structure could be gotten through optimization investment strategy, expanding the scale of introducing foreign trade, guiding foreign capital flow to the knowledge intensive and consumption intensive service industry, supporting different areas attract foreign investment developing area characteristic services.