An Analysis On FDI Late-development Advantage Of Developing Countries

In the background of economy globalization, foreign direct investment (FDI) is necessary to develop economy for developing countries. Developing countries have two kinds of advantages: one is comparative advantage; the other is late-development advantage. At present, theories often emphasize on comparative advantage and lack for thorough inquiry on theoretical study and practical value of late-development advantage. But in fact, in the condition of inequilibrium development of world economy, how to release late-development advantage is an unavoidable problem for developing countries to accelerate their economy development. Therefore, the author tries to introduce late-development advantage theory to analysis on the developing country FDI. Analysis demonstrates that late-development advantage, as a developing country FDI theory, can replenish the weakness of the western FDI theories which emphasize on comparative advantage or monopoly advantage. The study on some successful examples, such as North Korea and Taiwan, can not only support the late-development advantage, but also further analyze on the choice of Chinese FDI access according to late-development advantage. For the purpose of make effective and full use of late-development advantage, the author supplies four development modes for Chinese FDI. The modes include the mode of learning institution, the mode of researching technology, the mode of opening up markets, the mode of explore resources. In addition, according to the principle of making full use of late-development advantage, some advices are given on formulating and arranging the Chinese FDI institution.