A Study On The Infliucing Factors Of Location Selection Of FDI In China

Foreign direct investment is the main carrier of the world capital flow,and plays an extremely important role in the process of international economic development in China.It is the main economic support after China's reform and opening up.Since the reform and opening up,the investment level of foreign-funded enterprises in China has been significantly improved with the deepening of policy support and openness.The massive infusion of foreign capital has greatly promoted the economic growth,the regional economic development,industrial structure upgrading,technological progress and institutional change of China.Foreign direct investment in China has the development trend from east to west,mainly assembled in the eastern coastal areas,having a great impact on economic development.On the other hand,it also widened the economic gap among eastern,central and western regions,leading to the uneven regional distribution of foreign direct investment.After the financial crisis,the great fluctuation of global capital market and the leap of the risk of financial market make that the development of foreign direct investment in China has entered a new stage.In order to make the development of economic stable,the industrial structure adjustment and upgrading become a top priority.Only making full and efficient use of foreign direct investment can make economic development of the Middle,East and West relatively balanced.So the influencing factors of the distribution of foreign direct investment in the three areas has become the current issue which we should seriously consider.Firstly,this paper summarizes results of the different researches which focus on the location choice.Except he basic theory,scholars used different methods to study the factors which influenced the location distribution of foreign-funded enterprises,such as market size,economic policy,cultural environment difference and infrastructure construction.Secondly,this article uses a lot of statistical data to sort out the development history of foreign direct investment in China from 1979 to 2015 and analyzes the investment situation of foreign investment in the three regions.According to the development level of the economic and geographical position,China is divided into three economic areas of the eastern,central and western regions.This paper also fully compares the investment of foreign-funded enterprises in eastern,central and western regions,based on the huge data.This paper expounds the influencing factors of foreign direct investment in China,mainly including market factors,cost factors,agglomeration factors,the level of scientific and technological innovation and so on.In this paper,data of 31 provinces from 2006 to 2015 is considered in the model.The panel data model is used to analyze the influencing factors of location choice of the foreign-funded enterprises in the three areas,8 variables-the regional GDP,the total retail sales of social consumption,the average wage of urban workers,the number of students in higher education,the number of patent licenses,the degree of market opening,the construction of infrastructure,the number of industrial enterprises above designated size and so on,testing the various variables of the rationality and effectiveness.The compare and analysis of the results of this measurement intuitively show the degree influencing factors on the location choice of foreign companies.The results show that human resources and technological level are more and more important in the location choice of foreign investment in east and central areas with the elapse of time and the development of social,breaking the old study which shows that the market investment scale,GDP and other factors have a significant impact on the choice of foreign investment.In the western region,infrastructure construction and the degree of openness of the market are still the main factor.In addition,the agglomeration effect is also important to attract foreign direct investment in the western region.Finally,this paper summarizes the location choice of foreign direct investment in China after the financial crisis,and points out that the human resources and the level of science and technology should be the primary concern of the introduction of foreign capital.China should improve the infrastructure construction in the central and western regions,fasten the level of market development,in-depth explore of the central and western market potential.