The Study For Foreign Direct Investment’s Effects On Change Of Yangtze River Delta’s Industrial Structure

Foreign direct investment can meet host country’s financial needs, it brings advanced technology and management experience for the host country, meanwhile as it may generate negative effects, It isn’t sure that foreign direct investment can promote the upgrading of industrial structure and improve economic development of the country. Since the reform and opening up, foreign direct investment has made important contributions to promoting industrial and economic development of the Yangtze River Delta region on the whole. Due to the regional differences, foreign direct investment has different effects on upgrading of the industrial structure in the Yangtze River Delta region inside. In this paper, the three provinces and one city in Yangtze River Delta are the objects for the study, discussing how and in which extent the foreign direct investment’s effects on the upgrading of industrial structure in each region of the Yangtze River Delta by using Empirical Analysis. The paper analyzes the reasons of different influences that foreign direct investment has on upgrading of industrial structure and puts forward recommendations.The paper puts foreign direct investment’s effects on upgrading of industrial structure in the three provinces and one city of Yangtze River Delta as the main line, the main contents are as follows:1. Finding domestic and foreign literatures, Integrating the previous study, analyzing mechanism of foreign direct investment’s effects on upgrading of industrial structure. The conclusions are:The actual development and quality of foreign direct investment are different in each country or area, foreign direct investment has different effects on upgrading of industrial structure in each country or area, the effects maybe positive, negative or insignificant.2. According to the foreign direct investment and actual development of industries in the three provinces and one city of Yangtze River Delta, The paper points out the features of foreign direct investment, the history and present situation of industries development in each area. The features of foreign direct investment in the three provinces and one city of Yangtze River Delta are:(1) On the whole, the scale of foreign direct investment is larger and larger in each area. (2) Foreign direct investment is main from Asian countries, the number of the European and American’s foreign direct investment is less relatively. (3) Shanghai’s foreign direct investment is mainly distributed in the tertiary industry, while it is mainly distributed in the secondary industry in Jiangsu, Zhejiang and Anhui, the foreign direct investment in the primary Industry is seldom. In the aspects of the features of industries development in each region:(1) Tertiary industry is Shanghai’s dominant industry. (2) Jiangsu and Zhejiang have developed secondary industry, and the tertiary industry develops fastly, there is a tendency that the development of tertiary industry can catch up the secondary industry’s. (3)Anhui’s tertiary industry’s development has lagged behind, the primary industry takes certain proportion, it maily develops its secondary industry.3. The paper builds Panel Data Model in each region and discusses foreign direct investment’s effects on upgrading of industrial structure in the three provinces and one city of Yangtze River Delta by using Empirical Analysis. The conclusions are: Foreign direct investment promotes the upgrading of industrial structure of Shanghai, Jiangsu and Zhejiang, and the positive effect on Shanghai is the largest, Jiangsu followed by, Zhejiang is the least. Foreign direct investment has no significant effect on upgrading of industrial structure in Anhui.4. In the environment of the process of regional economic integration is accelerating, The paper puts forward recommendations, then it analyzes the outlook of foreign direct investment’s positive effects on upgrading of industrial structure and economic development in the three provinces and one city of Yangtze River Delta. Optimizing investment environment, Consummating foreign direct investment’s channel, Guiding foreign direct investment’s flow direction, Enhancing the absorption capacity, Coordinating the regional policy of foreign direct investment, Promoting the upgrading of industrial structure in every area and all the Yangtze River Delta region.