A Research On The Spatial Spillover Effects Of Service Fdi In China

In recent years, China’s foreign direct investment in service sector tend to exceed that in manufacturing, playing an important role in promoting output growth and structural optimization in services.Consequently, the spillover effects of FDI in service industry attracts widespread attention among academics.However, since the FDI has the characteristics of "spatial dependence", its influences will go across the provincial boundaries. In contrast to earlier work, this paper puts special emphasis on spatial spillover effects generated by FDI in service sector on the basis of the framework of endogenous economic growth theory. Combining spatial panel data from the year of2003to2012with spatial durbin mode(SDM), we use maximum likelihood estimation (ML) method to carried on the empirical research and testing of spatial spillover effects of FDI in service industry..Specifically, this article can be divided into following six parts. The first chapter describes the research background,significance and research ideas. The second one reviews the related literature at home and abroad, then making a brief review.The third chapter explores the theory foundation and discuss the mechanism of FDI spatial spillover. The fourth chapter gives the analyses of the current distribution of China’s foreign direct investment in service sector. In the fifth chapter,this paper uses the growth rate of output per capita of service sector as the explained variable, the growth rate of foreign capital, local capital and labor as explanatory variables, the local conditions as control variables.Through spatial autocorrelation test and spatial specification tests, this article has confirmed the appropriate form of space model that leads to the final estimations of FDI’s spatial effects of service sector by the ML method.Further more,this paper conducts a robustness test to confirm the results’robustness. Chapter six summarizes the conclusions of the research, and state relevant revelations and policy suggestions.Research results suggest that:First,the increasing amount of FDI in service sector in China becomes the mainstream of the foreign investment.However,it still has some problems such as unbalanced distribution in sectors and in regions; Second, the model without spatial effects dose not obtain good reaults or approprite explations;In the end, the spatial effect model estimation results imply that there exists significantly negative spatial spillover effects of FDI in service,while the domestic capital shows positive direct effects.The accumulation of labour dose not reveal any benefits to the promotion of productivity inside or outside the region in this research.In addition, the results indicate that local conditions do have some influences on the economy performance of service. According to theoretical analysis and empirical analysis,the author puts forward some specific policy recommendations as follow:Promoting the coordinated progress of regional development, avoiding the vicious foreign investment competition between the regions; upgrading the industrial structure in the eastern part of China and fostering the capability of absorbing the industrial transfer in the middle of China; As to the west part, China’s government and other regions should give more support.