Unbalanced Distribution And Spatial Spillover Of FDI

In recent years, the trend of economic globalization is increasingly clear, the rapid development of foreign direct investment and transnational corporations has become an important engine of world economic growth. Countries around the world, in order to promote domestic economic development, are committed to attract foreign investment. Especially, developing and transition countries are based on the primary objective of attracting FDI. In2006, FDI absorpted in China reached69.468billion U.S. dollars. China is the world’s fourth largest FDI absorption after the United States, Britain and France. There are130companies choosing to carry out investment in China in the global top500manufacturing multinational corporations.However, with the deepening of economic globalization, intensifying international competition among enterprises, in order to meet the competitive needs of the situation, multinational corporations, in the choice of production sites, has begun to focus on the industrial chain integration, and international direct investment followed to show new features of the spatial distribution. From FDI the location distribution in China, foreign investors attracted by coastal areas, the Yangtze River area, central, northeast, southwest and northwest are gradually decreasing. After the reforms, foreign capital has been relatively concentrated in the coastal areas, and three hot investment area of the Pearl River Delta, the Yangtze River Delta and Bohai Investment Zone are formated. The three together accounted more than70%for attracting foreign direct investment in China.The aggregation effect of FDI enhanced the local regional advantages. At the same time, cross-regional production activities arrangements did not only lead to foreign capital inflows in the sur rounding areas, but also create spillover effects of FDI gathering space.FDI in the city of Su zhou list the top in our country, which mostly because it is adjacent to the economic center of Shanghai. Foreign-invested enterprises transferred Production plants and other facilities to the Suzhou area, which reduce production costs and is proximal to target markets, so in the short term Suzhou City had accumulated a large number of FDI.Anselin (1998) pointed out that from an econometrics perspective, ignoring spatial effects or third-party effect will result in the omission of important explanatory variables, thereby making the results biased and inconsistent. Therefore, this paper, considering relevant research at home and abroad, basing on "third-country effect" theory and using spatial panel regression model, make a comparative research for FDI selection mode in the Yangtze River Delta and the Pearl River Delta. Regression analysis showed that the Yangtze River Delta and the Pearl River Delta of FDI location choice model is different:(1) there is spillover effect within the Yangtze River Delta, and there is also intense competition that human capital, rich calendar, aggregation effect, lower the cost of land will have an advantage in this circle.(2) The spillover effects of space within the Pearl River Delta was not significant, and GDP and land cost are the main factors of the internal distribution of foreign capital. GDP promote to attract foreign investment, while the higher land cost is the foreign investment bottleneck. Because of expensive land, part of the foreign investment began to flow to the Yangtze River Delta. At the same time, it is easy to discover the effect of human capital to attract foreign investment is not obvious, to some extent,the Pearl River Delta dominated by "Enterprises of Processing Industries and Compensation Trade", produce relatively low technological products, whose technological innovation activities is significantly lagging behind the Yangtze River Delta’s.Finally, based on the regularity features of FDI regional agglomeration, this paper deeply thought about the measures to attract foreign capital under the new situation. China’s foreign capital policy was initially concerned about improving the hard investment environment, the latter half of the last century90’s period, with the hard environment throughout the infrastructure, the gradual improvement of foreign capital began to shift the focus to create a soft environment for investment. Enter the new century, aiming to the trend of multinational investment in the industrial chain, the local government’s strategy must be timelyconverse, from the previous emphasis on building the hard environment and soft environment for investment up to shape the business environment, thereby enhancing the stability of foreign-funded position, and we can take full advantage of the aggregation effects of FDI in China to improve the efficiency and let it make greater contribution to our various regional and national economic development and industrial upgrading.