Specialization、variety, And The Transformation In Foreign Investment Attraction

With the further advance of economic globalization and China’s economy gradually formed the new normal. The situation of attracting foreign businesses and investment has greatly changed both at home and abroad. On the whole, the industrial structure of absorbing foreign capital and the level of using foreign capital had further optimized. The regional effect of absorbing foreign capital has optimized too. At present, countries and areas have enlarged the attraction and competition of foreign capital. China’s FDI verall benefit, how to promote foreign investment utilization and industrial upgrading, how to improve the capital quality, how to adjust the investment strategy, all of these have became the focus problem.To study the influences of specialization, diversification on FDI, the paper select more than 262 cities in China as the sample. First of all, the paper analyzes the mechanism of interaction between specialization、variety and FDI. Then we put forward the research hypothesis and build the GMM regression model.The empirical analysis result basically answered the following three questions: what is the new situation of foreign investment? From the industry level and the angle of the agglomeration externalities how should we consider the effect on FDI and how to strengthen and consolidate the advantage of attracting foreign capital in aspect of cluster? How much impact does the externalities of urban agglomeration show on the quantity and quality of FDI? The empirical results show that urban agglomeration level is an important factor to attracting FDI.But diversified agglomeration of FDI is more significant, it means that the foreign capital tend to choose the city with a balanced development in all the industries. When improve the level of diversification a percentage point, it can improve the quality of foreign investment 0.0505 points. Promoting the development of diversification of industry can attract more and higher quality of foreign investment. In addition, the paper divided the cities into two groups to observe the influence of specialization, diversification in different areas on the foreign capital. We found that the impact of the diversification on foreign investment are very significant in the coastal city. And the specialization can help improving the quality foreign investment. But influence of specialization and diversification one FDI in the inland areas is not obvious.Finally, on the basis of empirical analysis in this paper and combining with industry development and regional investment situation in China. The paper put forward the following related policies, we according to the regional comparative advantage of industry layout, and with the situation of the urban industrial agglomeration to guide the inflow of foreign investment, and to improve the quality of foreign investment, to adjust the investment strategy and related policy suggestions. In this paper, the research will be conducive to the planning of city industry, providing a new angle of view about how to attract FDI more efficiently, meanwhile provide guidance of new ideas to reduce FDI regional distribution.