The Research On Relationship Between FDI And Industrial Agglomer Ation In Dalian

In recent years, with the acceleration of international industry transfer and adjustment, foreign direct investment (FDI) and multinational mergers and acquisitions play an increasingly remarkable role on global economy. China’s reform and opening-up policy opens the door for being a part of open economy system and foreign capital. A large number of foreign investments swarmed into the largest developing country and the potential market. China has been the first place of attracting foreign direct investment for many years, Dalian, one of the firstly open city by State Council and attracting foreign direct investment in the old industrial base in northeast, has been attracting investment to develop, and using of foreign investment played an important role in promoting economic growth, speeding up industrial restructuring and technological progress, raising the employment rate in Dalian. At the same time, Dalian has reached remarkable achievement and been the top place in attracting foreign direct investment in China, According to2011statistics, in2010Dalian has actually used of foreign direct investment amounted to＄10.03billion, occupied the first place of deputy provincial cities, became one of the most using foreign capital city.The traditional theory of FDI thinks, in the view of the layout, the FDI has showed a high degree of central tendency in the space, which has gained more and more attention in attracting foreign investment. The high efficiency and low cost advantage, which brought by industrial agglomeration, have much attraction to FDI. Industrial agglomeration has been one of the important factors of FDI. At the same time, location choice of FDI, especially a few number of multinational cooperation could affect industrial agglomeration,"Follow the customer" in the supply chain could lead to the industrial agglomeration. FDI technical spillovers will make the optimization of structure and competitiveness of the industry. An obvious consequence between FDI and industrial agglomeration forms mutual promotion and promotes economic development.Based on relevant theories and literature review of FDI and industrial agglomeration, the paper discusses mechanism of interaction between FDI and industrial agglomeration, combines FDI and industrial agglomeration characteristics of the present situation in Dalian, used time series data, constructed measurement model, qualitatively analyzed the relationship between industrial agglomeration and FDI to form the benign "cause-and-effect cycle" accumulated mechanism, explained and discussed the measurement results, at last put forward policy suggestions of the present situation of Dalian.There are five parts in the paper:the first part is the introduction. The paper mainly discusses the significance, background, core of the related concepts, methods, innovations and shortcomings. The second part is mechanism of analysis on relationship between FDI and industrial agglomeration. FDI is of great importance in promoting industrial agglomeration. It is a collective action process of industrial supply chain enterprise for cost reduction and higher profits. The paper analyzes the mechanism of industrial agglomeration to attract FDI. In the theory of FDI location of choice, combined with the industrial agglomeration it describes the industrial agglomeration mechanism how to attract FDI. The third part analyzes the current situation of FDI and industrial agglomeration in Dalian. By reviewing the history of using of FDI, as well as it analyzes current situation of FDI, character of using of foreign capital from country-specific sources, industry and investment in Dalian, and then elaborates industrial agglomeration status of Dalian. The fourth part is the metric analysis on the relationship between FDI and industrial agglomeration in Dalian. Regression analysis of cross-sectional data on FDI and industries agglomeration in Dalian, we can conclude that they have the mutual affection, and then analysis the time-series data to prove that there is a causal relationship by unit root test, co-integration rank test and granger causality test.The last one raises the suggestion to attract FDI and promote industrial agglomeration in Dalian.The innovation of this paper is considering Dalian as the case, with local reality and the perspective of industrial agglomeration to research FDI, establishes the econometric model of the relationship between manufacturing and industrial agglomeration, to show the relationship between FDI and industrial agglomeration of Dalian. But there is a certain deficiency in metric analysis, because of the difficulty and length of data collection, the paper only analyzes the representative industry.