Research On The Influence Of Industry Agglogeration On The Service FDI

With the integration of the world economy and the internationalization of the service industry,the trend of foreign direct investment(FDI)transfers to the service sector has become more and more obvious.After the economic crisis in 2008,foreign-funded enterprises become more cautious in choosing the host country to invest,especially the role of industrial agglomeration in service FDI has becoming increasingly prominent,and the traditional OLI paradigm cannot fully explain the phenomenon that service FDI is becoming geographically concentrated.Therefore,it has great theoretical and practical significance to study the mechanism of industrial agglomeration in the process of absorbing service FDI for the rational use of foreign capital to promote the balanced development of economy.The current research on FDI from the perspective of industrial agglomeration mainly focuses on manufacturing industry,and even some research on the service FDI is more concentrated in the location selection,while effects on service FDI have not been fully recognized.This article based on the classical theory of service FDI and industrial agglomeration,combined with our country reality,use the method combining theoretical and empirical analysis to study.Firstly,we summarizes the classical theory of service FDI,industrial agglomeration and the impact of industrial agglomeration on service FDI,and make a brief comment;Secondly,we analyze our service FDI and industrial agglomeration reality,use the location quotient index to measure the manufacturing and service agglomeration of 27 provinces in China;Thirdly,we analyze the mechanism of industrial agglomeration in the process of absorbing service FDI by the external economies of scale effect,the industrial correlation effect,the path dependence effect,the transaction cost effect and the innovation effect,and establish a multiple regression stata model,use the panel data of China's 27 provinces from 2004 to 2015,to test the manufacturing agglomeration and service agglomeration's effect in absorbing service FDI,which shows positive impact;Finally,based on the conclusions,we propose some relevant policy strategies.China's service industry has developed rapidly in recent years,and it has already exceeded 60%of China's total FDI in 2014 and maintained steady growth,and it has become the mainstream force to attract foreign capital inflow in China's economic development.However,the overall development of FDI in China's service industry is unbalanced,which shows obvious industrial preference and regional preference:Most of the service FDI inflows are concentrated in the industries such as wholesale and retail trade,leasing service industry,real estate industry and finance industry,while other industries like education FDI inflows is almost 0;Compared with the western,central and northeastern regions of our country,the eastern provinces are more likely to attract service FDI by virtue of their geographical,economic and demographic advantages.From the conclusion of this paper,manufacturing agglomeration and service agglomeration have a significant positive impact on the inflow of service FDI,Specifically,manufacturing agglomeration is the decisive reason for the inflow of service FDI based on the abundant supply of labor and development demand;service agglomeration is the important reason based on the ono-separability of its production and consumption,the "path dependence" effect.In addition,the control variables such as the openness of the economy and the completeness of the infrastructure also positively affect the inflow of FDI.The inflow of service FDI promotes China's economic growth and accelerate the service market more international,but it also affects the overall geographical distribution of China's economic activities and widens the regional development gap.Therefore,according to the conclusion,we propose that the government should pay more attention on combining the foreign investment and industrial agglomeration,service FDI and regional economy,build regional innovation systems and other measures to take full advantage of industrial agglomeration to attract foreign investment to promote internationalization of our service industry.