Research On The Influencing Factors Of Urban Foreign Investment Attraction Based On SEM

The investment attraction of a city is closely related to its future development potential.The flow of capital represents the future development direction of a city.By attracting investment,a city can rapidly improve its economic strength and competitiveness,so capital attraction is very important for a city.Among them,the attractiveness of foreign capital is an important aspect of the attractiveness of urban investment,which more intuitively reflects the attractiveness of the city to capital.Since the reform and opening up,foreign investment has gradually flowed to China,which has greatly promoted China's economic development and injected great vitality into China's economy.In recent years,China has made good achievements in attracting and utilizing foreign capital.According to the World Investment Trends Monitoring Report issued by the United Nations Conference on Trade and Development,in the first half of 2018,global FDI fell by 41%,and investment fell by $470 billion from a year earlier.Over the same period,China's FDI inflows increased by 6%,totaling more than $70 billion,making it the largest FDI inflow country in the world.Under the severe situation of international investment as a whole,China can still achieve counter-trend growth,which proves its strength in attracting and utilizing foreign investment.But there are also many problems in the utilization of foreign capital in China.For example,the quality of foreign capital utilization still needs to be improved,the gap of foreign capital utilization among cities is still large,and the level of foreign capital utilization in the western region needs to be improved.At present,the global economic situation is not optimistic,and global overseas investment has fallen sharply.Under such circumstances,how to make good use of foreign capital is both an opportunity and a challenge for China.Therefore,in this context,it is necessary to study how to improve the investment environment,make better use of foreign capital and improve the attractiveness of foreign capital in cities.At present,in order to encourage the inflow of foreign capital,many cities have introduced preferential policies for foreign capital.I think there are many factors that affect the attractiveness of foreign capital in cities,such as the level of economic development,industrialization,soft power of science,technology and culture,social security level,labor cost and so on.Generally speaking,cities with developed economy,high level of industrialization,strong soft power of science,technology and culture,high level of social security and low labor cost will attract more foreign capital,while cities with backward economic development,low level of industrialization,weak soft power of science,technology and culture,low level of social security and high labor cost will perform poorly in attracting foreign capital.The purpose of this paper is to analyze the factors affecting the attractiveness of foreign investment through structural equation model,and to explore the internal structural relationship between them.This paper chooses foreign investment attraction as potential endogenous variable,economic development level,industrialization level,soft power of science,technology and culture,social security level and labor cost as potential exogenous variable to form a structural model.For each potential variable,several representative observation variables are selected to represent the measurement model.Based on the above analysis,this paper assumes that the level of economic development,industrialization,soft power of science,technology and culture,social security level have a positive impact on the attractiveness of foreign investment,and labor costs have a negative impact on the attractiveness of foreign investment.Structural equation model has two estimation methods,LISREL and PLS,which have different application conditions.In view of the characteristics of the data and model,this paper chooses PLS in structural equation model to estimate,and uses smart PLS 3.0 software to analyze.In view of the different statistical caliber adopted by cities above prefecture level and cities at County level,this paper defines cities above prefecture level as the research object,and selects the data of 99 cities in 2016.All the data come from the "China Urban Statistical Yearbook 2017" issued by the Statistical Bureau.On the basis of preliminary processing of the data,the model is fitted.In the process of fitting and revising the original data model,through the analysis and comparison,revision and selection of different models,an optimal model is finally obtained,and the relationship between the variables in the model and the whole model are analyzed and explained.Finally,this paper draws the following conclusions: the level of industrialization,economic development,urban security,cultural and educational level will have a positive impact on the attractiveness of foreign investment,labor costs will have a negative impact on the attractiveness of foreign investment.Finally,the conclusions are analyzed,and the countermeasures and suggestions on how to enhance the attractiveness of foreign investment of each city are put forward.