Foreign Direct Investment Location Choice Influencing Factor Analysis Based On Panel Data

Since the reforming and opening policy, the foreign direct investment has developed by the unprecedented speed in our country. But the foreign direct investment displays the obvious location difference. From 1983 to 2006, the proportion that the eastern area accounted for the foreign merchant total investment has maintained above 85%, the middle and the western area adds has been lower than 15%. In the eastern area, the foreign direct investment has been centralling from the Zhujiang Delta and the link Bohai Sea area to the Yangtse Delta unceasingly, moreover this central tendency is further strengthening.This article has studied the foreign direct investment location choice behavior from qualitative and the quantitative two aspects according to the foreign direct investment theory and the new economic geography theory. As for the qualitative analysis, Mainly from policy factor, cost factor, market effect, gathering effect, Based on this carries on the empirical analysis using the Chinese interprovincial panel data then built a panel data model.Empirical study result indicated, The foreign direct investment location choice is a dynamic evoluting process. At the beginning of reforming and opening policy, by reason of advantageous geographical position and government policy supporting, The foreign capital Concentrated in eastern area; In the 90s, the external economy effect which to the foreign direct investment's attraction mainly comes from the local industry and the preliminary foreign direct investment. But the market size is small to the foreign direct investment location choice's influence, the foreign direct invests the performance in China for the spatial in self-cumulative effect; after 2001, the local industry's attraction starts to drop. The foreign direct investment besides displays the space self-cumulative effect more to regard the China giant market size, The foreign direct investment strategy started to change to the market development, the market size has played the major role.