Study On The Fdi's Crowding-in And Crowding-out Effect Upon Domestic Investment In The Central Region Of China

With the rapid development of FDI,more and more attention is being paid to its impact on economic of the flowing-in country.One focus is about how the FDI affects the flowing-in country's domestic investment, whether the FDI crowds in the domestic investment or crowds out the domestic investment.This essay studies the crowding-in and the crowding-out effects in the central region (Anhui, Jiangxi, Hubei, Shanxi, Henan, Hunan), Logically, firstly, it analyzes the transformations of the FDI in amount, distribution in different industries and different areas, the flowing-in patterns and the origins in the central region since 1979; secondly, this essay chooses the panel-data arranging from 1986 to 2008 of six provinces in the central region to make the empirical research and chooses 1986-1992,1993-1997,1998-2008 three stages to analyze the effect of FDI.And then this essay uses the time-series models to analyze the effect of FDI on domestic investment in the central provinces. The results show that:FDI in the whole central region crowds in the domestic investments; as for the six provinces, in addition to Shanxi Province which shows a neutral effect, FDI of the other provinces crowds in the domestic investment differently. Finally, it analyzes the reasons why FDI makes different effects in the whole central origin and different provinces. Then it gives out the Policies which suggest on reinforcing crowding-in effects and weakening the crowding-out effects.