Study On The Evaluation System Of FDI Regulation Effectiveness In Shandong Province

Traditional FDI theories focus on the influence of international standards on FDI regional distribution and flow scale as well as the rationality of the growth of multi-national enterprises. Host countries of FDI put an emphasis on the measurement and effectiveness of FDI regulation and pay much more attention on the accomplishment of regulation goals than ever. Based on the actual situation of introduction and use of FDI in Shandong Province, this paper builds an evaluation index system of FDI regulation effectiveness for Shandong Province, with the hope of, to a certain extent, making a contribution to the research of evaluation of FDI regulation effectiveness. Doing a systematic and objective evaluation of FDI regulation for Shandong Province can promote the ability of government to guide and control the use of foreign investment and optimize the concept and mode of utilization of foreign capital.Firstly, this paper defines the concept—regulation, FDI regulation and evaluation of regulation and further defines the research scope. Then by reviewing the related literature and the basic theory, the effects of FDI regulation are decomposed into a number of indicators in two dimensions—introduction and use of foreign investments. Furthermore, using the entropy-weight method to determine the index weight, a set of comprehensive evaluation index system of FDI regulation is established for Shandong Province. Using the Entropy-Weight Grey Relation Projection Model, this paper analyzes the effectiveness of FDI regulation for Shandong Province each year from 2001 to 2012. The results show that the effectiveness of FDI regulation for Shandong Province appears like a trend of rising wave, and relevant policies reflect the emphasis on the size of FDI and the technological levels of foreign companies. Suggestions are put forward: Shandong Province should periodically compile applicable regulations; update the concept and focuses of regulations; cancel inappropriate preferential policies; improve the standards of governance of regulation; and perfect the evaluation system of regulations.There are two innovations in this paper. One is that it reviews basic theories and the latest related literature, analyzes the effects of FDI regulation in Shandong Province after China participating in the WTO, explores the deep reasons that affect the effectiveness of regulations, introduces the concept of FDI regulation and regulation assessment, uses qualitative analysis method, and constructs the evaluation system of FDI regulation effectiveness in Shandong Province. The other is that it uses the real data to test the model, contains not only transverse qualitative analysis but also longitudinal quantitative analysis, to some extent makes positive and negative effects of the implementation of FDI regulation in Shandong Province clear and provides the basis for making and developing regulations.