Study On The Influencing Factors Of Attracting Foreign Direct Investment In Southeast Coastal Provinces

For quite some time,China has been a developing country with the largest population and the richest labor resources in the world.Low labor cost is an important factor for attracting foreign direct investment in the southeastern coastal provinces.With the rapid development of China’s economy,labor-intensive industries in the southeast coastal region have been transformed into technology-intensive type,among which not only labor quality has been improved,but also the costs have increased.As the frontier area contributing to China’s reform and opening-up,the FDI of eastern coastal area plays an important role in supporting regional development.Carrying out research on the impact of labor force on attracting FDI to the southeastern coastal provinces will notably provide relevant provinces with practical assistance in utilizing foreign capital more effectively with a more active attitude.Based on the new economic growth theory,international production trade-off theory,investment-inducing factor combination and other theories,this paper adopts literature analysis and empirical analysis to study the impact of labor cost and labor quality improvement on the attraction of FDI in southeast coastal provinces.Firstly,it conducts a descriptive analysis of the labor force status and the FDI-attracting situation in the southeastern coastal provinces,and puts forward relevant hypotheses.With the basis of theoretical analysis,taking the panel data of 34 cities in the southeast coastal provinces from 2010 to 2020 into account,an empirical study was conducted on the impact of labor cost and labor quality on the attraction of FDI by using the panel data regression model.The following five conclusions could be drawn through the research.Firstly,the higher the per capita education years is in a prefecture-level city,the more it can attract foreign direct investment.Secondly,the higher the proportion of R&D personnel in the labor force is,the more it can attract foreign direct investment.Besides,based on cost considerations,the lower the per capita wage level is,the more attractive foreign direct investment is.Fourthly,if the local talents with high education level show more innovative ability,they will be more able to attract foreign direct investment.Fifthly,regional opening and consumption potential have a positive effect on attracting foreign direct investment,while environmental regulation has a negative effect.Finally,based on the research results and analysis,this paper puts forward the following corresponding policy suggestions.Firstly,it’s necessary to focus on improving the quality and skills of laborers,strengthen the reform of higher education and subdivide research-oriented and applied talents.Meanwhile,more investment in skills training is required,for the sake of improving the professionalization and specialization level continuously.The welfare of workers shall also be improved in a reasonable degree,attracting foreign direct investment by strengthening talent construction.The second is to shape a better policy environment,including optimizing policies according to local conditions,establishing and improving relevant rules and regulations,improving the level of public and management services,and further improving the level of attracting foreign investment through policy guidance.