| Through theoretical research,normative analysis and empirical analysis,this paper investigates the interaction mechanism between China’s regional economic agglomeration and FDI,and finds the spillover effect of FDI in China’s sub-sectors and sub-regions.It can test the main factors of FDI in location selection and its role in regional industrial agglomeration.It is conducive to discovering the lessons of China’s introduction of FDI since the beginning of the 21 st century and has theoretical reference value for testing regional economic development.Through the research conclusions of this paper,policy recommendations for FDI management and regional economic development will be formed,which will help to guide the stable development of China’s economy under the “new normal”.In this paper,we first use the measurement method of concentration to analyze the concentration of FDI in China from multiple angles.Judging from the absolute value of attracting foreign investment and the proportion of actual use of foreign capital,Hong Kong has always ranked first in the past 20 years,and the top ten sources are relatively stable,including Hong Kong,the Virgin Islands,Japan,Singapore,South Korea,the United States,Germany and Taiwan.These countries and regions constitute the main sources of China’s FDI.China’s eastern region always holds the most important position to attract foreign investment,but the general trend is from stabilization to declining,and gradually spread to the central and western regions.From the perspective of the agglomeration characteristics of industrial distribution,the obvious trend in the past 20 years is to gradually shift from the secondary industry to the tertiary industry.Secondly,the analysis shows that industrial agglomeration reduces production costs,transaction costs,and information costs in the agglomeration area,and produces a correlation effect,thereby attracting FDI enterprises to enter and promote investment.At the same time,FDI can also promote the development and upgrading of industrial chains in the agglomeration area,and further promote the formation and evolution of industrial agglomeration.This fully demonstrates that there is a certain interaction between industrial agglomeration and FDI,and this interaction is particularly significant for developing countries.To learn and imitate from FDI enterprises,compete with FDI enterprises,enhance the flow of human resources from FDI enterprises and get support from FDI enterprises,and fully used the "spillover effect " of the joint R&D with FDI enterprises,the industrial agglomeration areas will be formed and promoted.Thirdly,through the establishment of VAR model with variables such as FDI,industrial agglomeration level,ODI(Outward direct investment),fixed asset investment and loan balance,quantitative analysis method is adopted to detect the interaction between industrial agglomeration level and FDI location selection.The results of the panel VAR model analysis show that the level of industrial agglomeration in a region will be affected by the location choice of FDI.Foreign companies and multinational companies always strive to get the biggest benefits with the lowest operating costs.When they choose direct investment,they tend to care for the economic level and costs of a region.When a region has cost and other advantages,FDI will tend to invest in the region;in addition,the impulse response function between variables is calculated,and analyzes the impact of random disturbances of different variables to the current and future values of other endogenous variables.The results show that there is an interaction between the location selection of FDI and the level of industrial agglomeration,and the impact of industrial agglomeration level on FDI location selection is more obvious and positively correlated;finally,the Granger causality between the variables is tested,and the guiding relationship between the variables can be seen.Among the three variables,namely ODI,fixed asset investment and loan balance,only ODI is the Granger cause for FDI,that is,in the level of industrial agglomeration,ODI,fixed assets investment and loan balance,only ODI Will guide the FDI location selection.There is a mutual influence between the location selection of FDI and the level of industrial agglomeration.The level of industrial agglomeration has a more significant impact on the location selection of FDI.The higher the level of industrial agglomeration,the more foreign direct investment will be attracted and the regional FDI will be improved.In addition,FDI can guide the formation of industrial agglomeration,and industrial agglomeration will not lead FDI,but will affect the further investment and development of FDI to a certain extent.Finally,through the panel data of industries and regions,the spillover effects of FDI to industries and regions are empirically tested.The results show that the entry of FDI will have a“crowding out effect”on the domestic enterprises of the industry,but the FDI on R&D will promote domestic enterprises and increased production efficiency.The interaction between domestic capital and foreign capital has positive effects on domestic enterprises,but the promotion effect is not significant;the forward spillover effect of FDI is negative and backward spillover effect is positive.The entry of FDI has a significant inhibitory effect on downstream enterprises,and has a significant “spillover effect” on upstream enterprises.It is mainly related to the position of FDI on the industry chain and the monopoly position in the industry;FDI will not promote the domestic enterprises in the region,but will cause the competitive pressure to domestic enterprises.thereby reduce the production efficiency of the domestic enterprises.FDI may bring overall economic growth of the region,but for domestic enterprises,the spillover effect is less than the crowding out effect;spillover effect of FDI is positive between regions,and has a greater positive effect on domestic enterprises.The flow of personnel in the adjacent areas is more frequent,and the technical elements of FDI will also flow into the domestic enterprises in the nearby areas,resulting in a significant “spillover effect”.Through the above arguments,combined with normative analysis and empirical analysis,this paper proposes four policy recommendations for China’s regional economic agglomeration and FDI development: combining the distribution of economic agglomeration and FDI to guide the region to more effectively attract FDI from target sources;make full use of the interaction mechanism between industrial agglomeration and FDI to create favorable conditions for attracting FDI;carefully analyzes the relationship between industrial agglomeration and FDI location selection,to attract FDI and promote industrial upgrading in the region;to guide the local government to attract FDI enterprises more rationally according to the analysis of FDI’s spillover effect and produce the best results.On this basis,the paper puts forward more detailed and specific measures under each suggestion,including: attract FDI from the target markets;inland provinces should take active and effective measures to undertake the Industrial transference from the eastern region;China should transit from the traditional “world processing plant” to the development of the tertiary industry;create a well-equipped industrial concentration zone,create good conditions for FDI;create good conditions for technological spillovers;build good business environment;create favorable conditions for industrial agglomeration;use FDI to guide industrial agglomeration,complete industrial upgrading;encourage independent innovation,avoid the crowding out effects of FDI;guide foreign investment into appropriate position in industrial links,promote upstream and downstream development;strengthen inter-regional cooperation,make full use of spillovers effects.There are eleven measures in total.I hope that through the effective combination of theory and practice,FDI will be better attracted to China under the new situation and further promote China’s economic development. |
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