Based On The Perspective Of Regional Financial Development Of FDI Effect On Manufacturing

The global manufacturing industry development pattern and the economic development of our country environment has greatly changed, it is necessary to achieve low and medium technology manufacturing the transition to high-tech manufacturing under the strategy of "made in China 2025".To implement Manufacturing technology progress can be done by two ways, one is by independent research and development, the other is by the technology spillover of FDI. FDI can not only realize technological diffusion to improve productivity, but also can make up for the lack of local capital. However, the financial development level is the important factors influencing the FDI spillover effects of investment. Because of imbalance of regional economic development in our country, the level of foreign direct investment, regional financial development, manufacturing, development level appear larger gap. In the research of regional financial development impact on FDI in manufacturing should choose similar area for research. Four provinces of Shandong, Guangdong, Zhejiang, Jiangsu are located in the eastern coastal areas, earlier in China’s reforming and opening up, and are more in foreign direct investment. Four provinces of gross domestic product in the national ranking are in the top four, and are the main part of made in China. Therefore in the financial development perspective to study the effect of FDI on manufacturing plays an important role and puts forward policy suggestions.The paper firstly describes the situation of regional financial development, FDI and manufacturing in Guangdong, Shandong, Zhejiang and Jiangsu, then finds the phenomenon that is the higher regional financial development in the provice its FDI in the manufacturing sector is relatively large, and its electromechanical manufacturing industry accounted for a larger proportion in the structure of manufacturing. I write this paper from the financial development theory and the neoclassical growth theory, and use the general equilibrium model of the small open economy. To study financial development’s influence on FDI in manufacturing is used by capital effect and technology effect. And 26 kinds of manufacturing industry are classified into three categories. The different classification of manufacturing, the level of financial development and FDI are research objects. It is concluded by empirical that the capital accumulation effect and technology spillover effect are different. On the capital effect, the higher level of regional financial development, capital accumulation effect is more significant. The higher level of regional financial development accelerates the accumulation effect of FDI. However, improving the level of financial development, the funds will be more inclined to textile industry rather than electrical manufacturing industry. The technical effect caused by FDI is positive, and technology spillover effect of electromechanical manufacturing industry is stronger than it in textile industry. However the current level of regional financial development is negative to FDI technology spillover effect, the influence to mechanical and electrical industry is lower than it about the textile fabric. FDI to the per capita production of the manufacturing industry is mainly through the accumulation of capital and not by the technical progress. I finally obtain the conclusion used the data of the four provinces, then give some reasonable advice about the improving the level of financial development and reasonably absorbing FDI. We should build a multi-level, diversified financial market system to provide convenience for the financing of enterprises by reduced financing cost. We should reduce FDI on relatively low manufacturing, guide and support FDI to the high-tech electromechanical manufacturing.