An Analysis On The Relationship Between FDI Of Service Industry And Service Trade

Studies of the thesis centered on "relativity between the inflow of FDI to service industry and service trade". The thesis begins with preliminary analysis on the relationship between motivations of FDI flowing into service industry and service trade. It believes that FDI shifts to service industry due to the trend of service-oriented economic development and there is remarkable traceability between the inflow of FDI and export. The thesis then analyzes interaction mechanism between inflow of FDI to service industry and service trade. Through four determinative factors of competitiveness of service trade that are material capital, human resource, technology and institution, the thesis analyzes four effects of FDI improving service trade that are physical capital accumulation effect, human resource accumulation effect, technical spillover effect and institutional effect. It also studies on decisive factors of FDI on service industry from the perspective of recipient country to draw the conclusion that development of service trade will affect the decisive factors of FDI while promoting the absorption of FDI on service industry. Moreover, the thesis proves the relativity between inflow of FDI to service industry and service trade by testing time series data of China from 1986 to 2007 with co-integration theory and error correction model to come to the conclusion that FDI on service industry in China has long term equilibrium relationship with the development of service trade. Both FDI on service industry and commodity trade has affected the development of service trade and there is reciprocal causation between FDI on service industry and export and import of service trade. Based on these conclusions the thesis finally raises proposals on further attracting FDI to flow into service industry and promoting development of service trade including: appropriately grasping the rules of global industrial transition towards service industry to promote the inflow of FDI to service industry in China; speeding up upgrading of industrial structure of trade of goods and shifting of export goods from labor intensive industry to hi-tech industry; strengthening cooperation with emerging service industry in developed countries and regions to fill the blank of productive service in China; and accelerating managerial restructuring of service industry to create favorable environment for healthy development of service industry and service trade.