Research On The Influential Factors Of Foreign Direct Investment In Chengdu

Foreign direct investment (FDI) is one of the most active areas in current economic life. FDI also has been the main pattern of international capital China utilizing. With the constant increase opening up and the rapid development in economic, utilization of FDI has a speedy expanding scale in Chengdu. It is remarkable that Chengdu rank first with attracting FDI in China central and western cities in 2006 for the first time. So, it is significant for us to research the influential factors of FDI in Chengdu and put forward improvement proposal for at the moment, which can promote the economic development in Chengdu.The thesis starts with expounding dominance theory, the marginal industry expansion theory and the OLI theory which explain the motives of FDI. The analysis of these basic FDI theories lie theoretical basis for studying FDI Location selection below. Then, the paper reviews the empirical research literature on effective ingredient of FDI Location selection. It is observable that there are less empirical studies about FDI Location selection at urban level, especially relate to underdevelopment western city in China. Hereafter, this study makes a detailed summary of FDI general situation in Chengdu, analyzes characteristics as well positive effect from existing FDI in Chengdu.After expatiating on the status quo of FDI in Chengdu, the paper elicits top five kinds of influential factors on FDI in Chengdu combines with theoretical analysis and those research results of FDI location selection. These influential factors are cost factors, market factors, policy factors, risk factors and cluster effect factors. To representate these five categories of factors well, this paper selects nine variables as follows, GDP, retail sales of social consumer goods, the average efficiency wages of workers, the total post and telecommunications business, the policies related to China Western development and accession to the WTO, import and export trade volume proportion of GDP, the total FDI amount of two years ago, the number of college graduates, the amount of fixed assets investment.Finally, the dissertation introduce the multiple linear regression model, using Chengdu 1995-2006 data and Partial Least Squares (PLS) regression which is a new statistical method for multivariate data to make a empirical research on the influential factors of FDI in Chengdu. The degree of effect of every various factor is gained by the empirical study.