Analysis Of Different Sources, The Body Of Foreign Direct Investment Location Decision Factors

Inflows of foreign direct investment in China have grown fast since 1979. And it has exceeded America as the country with the largest inflows of FDI in 2003. Almost all the top 500 have invested in China till the beginning of 2007.It displays different developing trends when checking the inflows of FDI from different country groups since 1979. Based on the theory of Dunning's OLI paradigm and analysis of characters in industry structure, and MNCs, this thesis uses OLS model and analyzes the location factors appealing FDI from different country groups respectively: FDI from HK and Taiwai is more focus on labor cost, while FDI from European, USA, Japan and Korea is more focus on China market. Based on this analysis, the article also illustrates the reasons of the developing trends difference among different country groups and infers that China has starting to attract market-seeking FDI rather than source-seeking FDI.This thesis is divided into 5 parts:The introduction tells the contents and the significance as well as the research methodology. The second part gives the review of related literature with the focus on Dunning's OLI paradigm. The third part gives the first analysis about the developing trends difference among different country groups, characters of industry structure, and MNCs. The fourth part uses the OLS model to demonstrate the different location factors in attracting FDI from different country groups. It then provides the reasons of the developing trends difference among them. The last part brings forward the useful proposals concerning the FDI attracting for China.