| Service Industry has always been a significant part of Beijing’s Gross Domestic Product. Especially these few years, Service Industry has contributed at least70percent of GDP. Meanwhile, at least80percent of Beijing’s foreign direct investment has chosen Service Industry. This paper is designed to analyze the macroscopic influences of foreign direct investment flown into Beijing service industry. It is essential for attracting more FDI and the developing of Beijing service industry.This paper is analyzing the factors that affect Beijing service industry in attracting FDI, the results are:(1) Based on the literature reviewing, the ideas from The Eclectic Theory of International Production can be used in theoretical analysis. This paper analyses some relevant factors, such as market, cost, agglomeration effects, policy, etc. And how they affect the foreign investors when they choose a location or an industry. With the theoretical analysis, and through the recent development of Beijing service industry, this paper choose9factors as explanatory variable, such as GDP, wage.(2) Factor Analysis and Johansen System Cointegration Test are used, eventually the degree and rankings of the9factors can be get. This is one of the innovations of this paper.The result of empirical research indicates that the9factors are all positive to Beijing service industry attracting more FDI. GDP is the biggest factor, and next factors are urban infrastructure, agglomeration effects, education level, which are also having the bigger influences on industry attracting FDI. Dependence Degree of Trade and wage level are less importance factors.(3) Based on the empirical research result and analysis, and according to the bigger influential factors, I propose five suggestions in order to attract more FDI for Beijing service industry, which are keep economy growing, strength urban infrastructure, reinforce agglomeration effects, improve labor quality, keep trade openness a solid growth. |
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