Study On Agglomeration And Spatial Convergence Effect In FDI Across China

Since the90s in20th century, with the extent of China’s opening graduallyexpanded, foreign investment has poured into China and has greatly promotedthe regional development,becoming the major engine of regional economicgrowth. However, the regional distribution of FDI in China is extremely uneven.So the FDI growth around the region being convergence or divergence causedthe scholars ‘attention.Previous studies have put the regional FDI as "islandsof information",ignoring the complex links between the regional system, FDIgrowth depends not only on their own investment environment is alsodependent on the FDI growth trajectory of other regions.Therefore, this articleusing the decomposition of the Theil Index, Moran index, combined with thespatial econometric models (spatial error model (SEM), spatial autoregressivemodel (SAR) and regional convergence model to in-depth study during1992-2008the FDI dynamic trajectory of distribution differences, and regionalagglomeration. the role of spatial autocorrelation to the convergence of FDI.The main conclusions are summarized as follows:1.the Theil variation coefficient of FDI was U type dynamic trajectory. Theilvariation coefficient of overall China’s, eastern FDI was narrowing, thecentral FDI distribution differences was enlarging.the contribution of regionalFDI differences to the overall difference remained high.2. Using spatial statistical analysis method to study,The results suggest thatChina has remarkable spatial autocorrelation from1992to2008.the spatialagglomeration effect was rising. FDI distribution gradually formed a clear"caking Belt".Provinces that have positive spatial radiation effect are in theEast and the Middle, provinces that have negative spatial radiation effect are inthe West.3.Combining the regional growth convergence model and spatial autoregressive (SAR) and spatial error model (SEM) to measure convergence ofFDI regional spatial agglomeration effect.Found that: FDI in the eastern andwestern regions was convergence within the trend, but in the central interior region FDI was divergent. It can be seen that there was no obvious"club convergence" phenomenon in the FDI regional agglomeration.4. conditional factors of China’s FDI Regional Agglomeration and diffusionConvergence are infrastructure, openness, economic development level,market-oriented, government incentives, labor costs, human capital,agglomeration effects.Free movement of labor helped the FDI spread fromEast to Midlands. Government incentives, agglomeration effect can promoteFDI. Also,market capacity, economic development level, the agglomerationeffect Increasingly affect the FDI regional convergence.5. the FDI Spatial Linkage is associated with the convergence of regional FDI.there is a strong FDI dependence between regions, so the regional FDI growthdepends not only on their own investment environment, but also dependent onother regions of the FDI growth trajectory.China’s eastern, eastern-centralregions FDI have positive effect, promoting FDI regional convergence.However, the central-western regions overlap, vicious competition betweenprovincial, which restricts the FDI regional coordinated development.