A Study On The Factors Influencing FDI In Producer Services Of Shandong Province

In the1960s, as the world economy developed in depth, international division oflabor became more and more refining, the global economic structure made a lot ofchanges shifting from an industry-based economy to a service-based economy, andthe service sector became an important booster for economic growth in manydeveloped countries. As a sector of high-growth, high radiation and high employment,producer services, especially the modern ones, play a significant role in breaking thespace constraints of the industrial structure, getting rid of the resource constraints inindustrial production, reducing production costs and improving organizationalefficiency. It has become an important impetus for many economic entities toaccelerate the transformation of economic growth mode as well as realize theoptimization and upgrading of industrial structure."World Investment Report2004"said that the focus of world investment structure began to shift towards services frommanufacturing, and producer services industry had become the concentration offoreign direct investment.The development of producer services in Shandong Province lagged behind.Foreign investment in producer services can help to bridge the financial gap, narrowtechnological disparities as well as innovate management mode to boost thedevelopment of the producer services in Shandong province. However, according tothe current situation of FDI inflows in producer services of Shandong province, thenot high openness degree, low ratio of foreign investment in producer services and thenon-reasonable investment structure have severely restricted the promotion ofcompetitiveness in producer services of Shandong province. Therefore, how to attractmore and more FDI inflows in producer services is critical to the development ofproducer service industry as well as the whole social economy in Shandong province.In this paper, we take the FDI inflows in producer services of Shandong provinceas the research object. Firstly, we make an overview of related theories in producerservices and foreign direct investment. Secondly, we describe the current developmentsituation of producer service industry and its FDI in Shandong province. Then we make an empirical study on the relationship between producer services FDI and thedevelopment of tertiary industry in Shandong province. Moreover, we analyze theinfluence factors of producer services attracting FDI in Shandong province from twoaspects of theory analysis and empirical study. Finally, we put forward severalproposals to improve the ability of attracting FDI in producer services of Shandongprovince.