The Crowd In-Out Effects Of FDI On Domestic Investment In Jiangsu Area

In recent years, the domestic and foreign scholars' research concentration of economic effect of FDI in our country has changed from its economic growth and the technical extension effect to the capital formation effect in our country, that is, concentrate on the research whether FDI promotion or restrain our domestic investment. The successful attraction of foreign capital in Jiangsu Province in recent years has set an example in our country, and in 2006, it was the fourth year that Jiangsu Province got the first place of the effective use of foreign direct investment in our nation. Therefore, the research of Jiangsu Province will have the extremely typical meanings. Actually the large-scale FDI into Jiangsu Province has what influence to its domestic investment? And there are large disparities of the economic development and FDI inflow in southern, middle and northern part in Jiangsu Province, should the FDI capital formation effect be the same in the three areas? And what is the functional mechanism of the FDI in capital formation effect in Jiangsu? This article will try to solve the above questions, using the Panel-Data analysis, selecting the historic statistical data about 13 cities in Jiangsu Province ranging from 1990-2005, it establishes the measurement models of the whole area, southern, middle and northern districts. And this article will analyses the capital formation effect of FDI to domestic investment in the whole area and its three parts, and look further on the mechanical of capital formation effect. This paper is divided into six parts as follows:Chapter 1, Introduction. Briefly introduce the given question and research background, describe the content, research frame and related concepts.Chapter 2, Summary of related theories. Reviews the elementary theories of FDI from two aspects: the reasons of the form of FDI and the influence of FDI to the host country's economy.Chapter 3, The mechanism of FDI capital formation effect. Elaborates the domestic and foreign researches relate to FDI capital formation effect.Chapter 4, Jiangsu FDI present situation analysis. First, makes an overall analysis of the development of foreign direct investment in Jiangsu Province macroscopically, then concentrates on several aspects of the present situation about Jiangsu Province's foreign direct investment, such as, investment scale, profession distribution, district distribution, origin country (area) and the way of investment.Chapter 5, The real diagnosis analysis of FDI capital formation effect in Jiangsu area. Collects the data of 13 cities in Jiangsu Province ranging from 1990-2005, uses Agosin (2,000) invests model and Panel-Data gauging device, and analyzes the crowding in effect and crowding out effect of FDI to the domestic investment of Jiangsu Province and its southern, middle, northern parts.Chapter 6, The mechanism of FDI capital formation effect and real diagnosis result analysis. This chapter first briefly analyzes the FDI inflow's crowding in effect on domestic investment according to direct effect and indirect effect. As the fourth chapter tells, the FDI in Jiangsu province and its district parts has crowding out effect to the domestic investment, therefore, the article elaborates the crowding out effect of FDI to domestic investment as follow, mainly from the market level, the technical level, and the system level. Basing on the above rationale, the article finally thoroughly analyzes the reasons of the crowding out effect, FDI to Jiangsu domestic investment.Chapter 7, Summary and policy suggestion. According to the analysis above, this chapter proposed the policy suggestions, in order to precaution the crowding out effect of FDI to domestic investment in Jiangsu Province.