The Study Of The Effect Of Service Agglomeration On Services FDI In Suzhou

Along with the enlargement of the opening fields, there is no doubt that foreign direct investment gradually turns to service industry and the competition for international capital of services is increasing. Service agglomeration can not only reduce the enterprise cost, also expand regional brand effect. And the generation and development of service agglomeration itself become a local acore factor in attracting FDI. Since the new century, when promoting industrial structure upgrade, Suzhou also promotes the building of service industry agglomeration areas to attract foreign investment. In that context, this paper explores whether service agglomeration has a positive effect in service FDI in Suzhou by the combination of qualitative and quantitative methods. On the basis of existing research in China and abroad, this paper adopts Location entropy, Space Gini coefficient and Herfindahl index to study the service clusters in Suzhou. This paper empirically testes the impact on services FDI of service agglomeration from 1990-2014 through the regression data model. The econometric analysis results show that service agglomeration has a positive effect in service FDI in Suzhou. In addition, manufacturing FDI, infrastructure investment and human capital accumulation are also included. At last, this paper suggests effective supporting policies to promote services FDI inflows in Suzhou. Firstly, we should increase the preferential policies to promote advantage service industry agglomeration; Then, we should guide the direction of foreign investment and optimize the FDI investment environment; Finally, we should strengthen education investment and perfect infrastructure construction to promote Service FDI inflows in Suzhou.