Research Of Capital Influence To FDI

After financial crisis, China is in a crucial period of economic transformation and industrial restructuring. In this period capital deepening keep developing and the FDI inflow and outflow frequently. There is little research focus on how the capital labor substitution and capital deepening impact on FDI inflows. If we pay more attention on capital labor substitution and capital deepening, we can learn more about the impact which FDI inflows on economic.In this paper, we take Chinese provinces, autonomic regions and municipalities for a sample. Firstly, we use Hausman test to test the endogenous between capital labor substitution and capital deepening. Then we estimate the impact that capital labor substitution and capital deepening on FDI flows through the two-step of the system GMM. This study started around two parallel thoughts. We analysis the mechanism relationships among capital labor substitution, capital deepening and FDI flow. Meanwhile, we tried to explain some phenomenon which mentioned in the background.This thesis contains the four following main aspects①qualitative analysis on the capital labor substitution, capital deepening and the relationship between FDI flows, build theoretical model of capital labor substitution and capital deepening effect on the FDI inflows;②measured using relevant testing methods verification of capital labor substitution and capital deepening impact on FDI flows;③After joining the heterogeneity of factors, find the difference of impact on FDI inflows between capital labor substitution and capital deepening;④Get theoretical and empirical research results, provide policy advice .