Effect Of FDI Factor On Undertaking Service Outsourcing Of China

International outsourcing is increasingly becoming a major multinational business management model in developed country in economic globalization. European and American firms integrate to shift the focus of their manufacturing and business strategy to numerous developing countries to have formed the global production value chain taking outside production as its core. In recent years, a large number of outsourcing activities of transnational corporations have been coming to China, and more and more Chinese enterprises have been undertaking multinational outsourcing business to share and participate in global production system. The rapid development of the international outsourcing market is full of opportunities and challenges to Chinese enterprises, which is moving toward the international market. This article is based on the just background to combine service outsourcing and FDI from the mechanism and the actual relationship between them to study the relationship of service outsourcing and FDI and how to effectively use the relationship between them in China. Summarizing and digesting the basis of relevant research home and abroad, this article uses economic data to take empirical analysis by using Hausman testing and the establishment of econometric panel models from the undertaking technology spillover of FDI in international outsourcing and starts to use game analysis to expound Chinese FDI factor in international service outsourcing.This paper is divided into four chapters. Chapter I is Introduction, an overview of international outsourcing on the basis of a systematic introduction of the concept of outsourcing and classification. It explains the motivation generated by international outsourcing from theory of transaction cost, theory of core competencies and theory of value chain and also review and evaluates international outsourcing literature home and abroad. The second chapter is a core part of this article. On the basis of introducing the status of China to undertake international service outsourcing, it analyses the welfare effects of international outsourcing and the role of FDI factor in international service outsourcing, and then it explains the relationship between undertaking international service outsourcing and FDI. The third chapter is on the basis of the analysis of empirical analysis in the second chapter, building panel data model to study the role of FDI to undertake outsourcing in China, according to the data of 2000-2007, Chinese large-scale of east, north and northeast in undertaking technology outsourcing. such as Beijing (BJ), Tianjin (TJ), Hebei (HB), Liaoning (LN), Shanghai (SH), Jiangsu (JS), Zhejiang (ZJ), Fujian (FJ), Jiangxi (JX), Shandong (SD), Hubei (HBEI), Hunan (HN), Guangdong (GD), Guangxi (GX), Sichuan (SC) 15 important provinces. Chapter IV is the conclusions and recommendations of article. It elaborates the practical significance of empirical results of the role of FDI factor for our country to undertake international outsourcing and puts forward the countermeasures and suggestions to help the country to undertake international outsourcing and it will have a positive meaning in promoting Chinese industrial upgrading by undertaking international outsourcing.