Research On The Influencing Factors Of Foreign Direct Investment In China's Producer Services

By the end of 2016,the FDI inflows and outflows of China had become the second place in the world.At the same time,the average proportion of service industry by GDP in high income countries has reached 70%,while in the middle and high-income countries has been more than 60%.The proportion of China's service industry in GDP is only 50.2%,which is even lower than the portion of Brazil and Russia in transition period.And the analysis of the internal structure of service industry in high income countries has found that financial insurance,computer services,leasing and business services,R&D etc.have been growing rapidly,and the Producer Services has become the main motive force and innovation source of the economic growth of high income countries.Therefore,when we see the rapid development of China's foreign direct investment,we should also rationally consider the gap between China and other countries in the producer services industry.What is the domestic development of producer services in China? What are the factors that should be considered when conducting foreign investment? This is the question to be studied in this article.In the first part,this article combines the domestic and foreign scholars' research on the Producer Services,defines the concept of the Producer Services,and classifies its industry according to the production service industry classification(2015)in China.Then this paper analyzes and summarizes the characteristics of the industry development and the investment characteristics of the foreign investment in our Producer Services by using the statistical bulletin of China's foreign direct investment(FDI)written by the Ministry of Commerce over the years.In general,the foreign direct investment of China's Producer Services has obvious location-concentration and industry-concentration.The investment area is generally concentrated in Hongkong and Holland,and the industry is concentrated on the leasing and business industry.Then,according to the characteristics of the Producer Services,this paper combs the main transnational investment theories applicable to this study,such as the Monopoly Advantage Theory,the Internalization Theory and The Enterprise Heterogeneity Theory.Then,the third part is about the theoretical framework,which is based on the general analysis framework of enterprise foreign direct investment(FDI)organized by WTO in 1998.And we adjust the applicability of the model to the Producer Services.This paper analyzes from three perspectives: Host country,Home country and Enterprise,and puts forward hypotheses for all angles.The macroeconomic factors of the host country include the size of the market,the level of relative wages,the level of infrastructure,the level of technology,the level of government intervention,the abundance of financial capital and the level of foreign direct investment in the local manufacturing industry.The influencing factors of China are divided into seven factors: the level of economic development,the level of enterprise technology,the energy consumption,the degree of opening to the outside world,the cost of labor,the government factors and the exchange rate.From the view of the enterprise itself,the five following factors are selected enterprise productivity,capital density,profitability,investment benefit and debt level.In terms of empirical analysis,this paper proceeds according to the sequence of host country,home country and enterprise in the theoretical framework.In the host country,this article uses the foreign investment data of China's Producer Services from 2004 to 2016,as well as the economic data provided by the world bank.In the home country,this article selects the foreign investment data of China's Producer Services and the macroeconomic data of the home country from 2004 to 2016.Finally,the data of host country and home country are processed as panel data,and the least squares regression is applied.On the microcosmic data of the enterprise,this article mainly obtains the data from the WIND enterprise database and the overseas enterprise investment list.This paper selects the foreign direct investment data of the productive service enterprises from 2006 to 2016,and the final analysis method is the Logit dualistic regression model.The results show that,due to the particularity of its industry,the influencing factors are different from the manufacturing industry and other service industries.It is worthy to concern that the increase in the labor cost of the host country does not impede the direct investment of the Producer Services to it,but has a positive effect on it;secondly,in the case of the mother country,the use of energy is strongly linked to the foreign direct investment of the Producer Services;and at the enterprise level,productivity is still the same.There are strong factors that influence the outward FDI of enterprises.Besides,producer services have different investment needs for different types of countries.At the end of the paper,three suggestions are put forward for the development status and investment status of producer services in China.