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Research on the Location Factors of FDI in Modern Service Sectors of Jiangsu Province

On 13/12/2014, in Economics papers, by rain

With the development of information technology and the accelerated process of Economic globalization, the global industrial structure has undergone tremendous changes.Services gradually replaced the manufacturing industry of the dominant position of Economic activities. Finance, insurance, business, real estate and other modern service industry are international industrial Investment areas of focus.Foreign direct Investment is a major booster of rapid development of modern service industry.The share of services sector about foreign direct Investment in various countries are constantly rising.However, because of the international financial crisis and Economic recession, global foreign direct investment appears a clear downward trend.In response to this phenomenon, China’s modern service industry should pay more attention to what able to better attract foreign investment, and we all deserve careful consideration about it. As an economical developed province, Jiangsu is one of the most active areas attracting FDI of modern service industry.Also, the Jiangsu provincial government responds positively to the call center, has issued the relevant policies and regulations to guide and support the use of foreign capital to promote the accelerated development of modern service industry.Researching on the location factors of FDI in modern service sectors of Jiangsu Province has important practical significance.This modern service industry in Jiangsu Province to actively attract foreign direct investment as a clue.Firstly, the paper discusses the Basic theory of modern service industry and foreign direct investment.Secondly,this paper describes the Basic situation of the development of modern service industry and foreign direct investment of modern service industry in Jiangsu Province.And then this paper establish a framework about determinants of modern service industry’s Foreign Direct Investment in Jiangsu Province.This framework considers the demand factors, supply factors and market environment factors.On the base of the actual situation in Jiangsu Province and the data availability,we select eight quantifiable indicators and use time series models to analyse the effect of foreign direct investment about modern service industry in Jiangsu province.Finally, on the base of the results of empirical research and combing with the present situation of the modern service industry, we should increase the intensity of foreign direct investment,adjust the layout of the industrial sector distribution,develop the Education,improve infrastructure environment,try to improve the services market-oriented aspects step by step in order to improve the foreign direct investment of Jiangsu Province’s competitiveness.

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Study on the Influence of FDI on Chinese Human Capital

On 23/11/2014, in Economics papers, by rain

Human capital and FDI are the key drives of the Economic growth in the developed and developing countries. They do not affect the growth individually. FDI is very important for the development of human capital of the host country. Meanwhile, enhanced human capital increases FDI of the host country by making the Investment environment attractive to foreign investors.FDI is a huge engine of the increase of Chinese economy. Human capital is a significant resource that can achieve rapid Economic growth. By the end of 2005, Contracted foreign direct Investment has reached 1285.427 billion US dollars, and realized foreign direct investment has achieved 620.72 billion US dollars in China. The large amount of foreign capital has made up the insufficiency of domestic capital. Moreover, the overseas advanced technology has accelerated the industrialization process and promoted upgrade industries of our country. foreign funded enterprises are also running in most of fields in China, they have been using a range of training to enhance Chinese employees’ working abilities. In a word, they mean a lot to Chinese human capital. Therefore, the research on the impact of FDI to Chinese human capital has important academic and practical significance, in order to know the relationship between FDI and Economic growth better.The primary intention of this paper is to examine the characteristics and tendency of FDI and human capital and then to study the influences of FDI on the development of human capital in China. This article based on the fundamental research results integrates the latest developments of foreign direct investment and human capital, takes use of many tables and figures, theoretically and empirically, to analyze thoroughly the influence of the foreign funded enterprises on the Chinese human capital.This paper is divided into five chapters. Chapter one is a brief introduction on background of study, research meaning, structure and relevant concepts of this article. Chapter two is mainly a theory survey on both FDI and human capital. Chapter three describes the situation of FDI in China, the latest development of foreign funded enterprises and human capital briefly. Chapter four is a key one, which researches the effect of FDI on the quantity and effectiveness of human capital in our country theoretically and empirically. In addition, it shows that the effects of FDI on Chinese human capital are positive. Chapter five makes a brief summary of this paper and put off some proposal.

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The Eempirical Analysis to the Use of Chinese FDI

On 10/11/2014, in Economics papers, by rain

The Chinese FDI development may say that it began to appear from the year 1978 , preliminarily developed in the 1990s, had a short correction after the turn of the century, then started to step onto the road of a great nation of the FDI total quantity. The United Nations Conference on Trade and Development (UNCTAD),recently issued the world Investment forecast report showed that up to 2008, our country FDI amounted to 92,395,000,000 US dollars in the total quantity, break the 90,000,000,000 critical junction for the first time, maintein the first place of FDI absorption country. The relation of the foreign direct Investment and our country Economic growth is the focal point which we pay attention to. In using the foreign capital, the question which we want to solve with emphasis is how to introduce in the foreign capital better, and let the foreign capital displaying the biggest benefit to our country Economic growth, simultaneously use the technology containing in the foreign capital the best, ues the superiority of Management to raise our country industry technical Management level. In other words, the best using the foreign capital to develop our country economy from the quality and the quantity.The essay outlines the Chinese foreign direct Investment’s development process firstly, summarizes the status of using the foreign capital , from the three way of classification, the profession minute, the origin country(area) which the foreign direct investment come from, the using way of using the foreign capital, and then analyzes the condition and the primary cause of the foreign capital investment in the Chinese profession the last year.Afterward, the essay uses the method of econometrics statistical, undergoes the empirical analysis, firstly affirms the influence of the foreign direct investment to our Economic growth’s direct promotion, then empirical examins the foreign direct investment technical overflow effect and our country economic growth exists a direct proportion correlational dependence. The economic growth, the capital storage quantity, the labor force investment and the technical factor are playing the crucial role,are the Chinese economy long-term growth’s main determining factor. Unifies the above two demonstrations, the essay emphasizly analysis the influencing factors of the Chinese foreign direct investment, these factors obtains the Chinese economic growth rate, Chinese GDP per person, China’s labor force quality, the average wages per person, the foreign exchange reserve, the nominal exchange rate, and the tax revenue. They exist obvious positive and negative relations between the Chinese foreign direct investment. This conclusion has a certain significance to our economy development, the government adjust of economic strategy.Finally, according to the above empirical analysis result, proposes the personal opinion to the use of Chinese foreign direct investment, the use of foreign capital for developing economy, maintains the stability increase in Economics aspect. The key acts is that the government accords to the characteristic of our own economic development, guides the foreign capital to invest in our country weak industry, enhances the superiority industry’s international competitiveness. The government should strengthen the foreign capital system construction and the foundational construction, build a good environment for the introduction and using of the foreign capital. We should consummate the domestic market economic system, display the Basic function of the market’s resources deployment, emphasize free competition., adjust the strategic plan of introducting foreign capital, promot the foreign capital to make the biggest contribution to our country economic growth.

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Study on Contribution of FDI on Economic Growth in Ethnic Regions

On 18/10/2014, in Economics papers, by rain

Inner Mongolia as China’s first ethnic minority autonomous areas, accuratelypositioned development strategies which were suitable for the area, since the reform andopening up, especially in the country’s background of the policy to carry out “Development ofthe West Regions”,” the revitalization of northeast old industrial base”, since2002, itmaintains the first place in the GDP growth for9consecutive years, which has written thenew legend of Chinese western’s Economic growth, and known as “the phenomenon ofInner Mongolia” in the development of the west regions”. It is absolutely inseparable fromthe foreign direct Investment on Inner Mongolia’s Economic development. Foreign directinvestment in Inner Mongolia grow out of nothing and from small to large scale, and theinvestment structure that is from low to high, has been rapid development in recent years.In general, this text deeply understands the use of foreign direct Investment in InnerMongolia and Economic development status, and give the theoretical and empirical analysison the relationship between the foreign direct Investment and economic growth in InnerMongolia on the basis of reviewing and analyzing the foreign direct investment andeconomic growth theory, and on this basis some policy suggestion has been put forward, andprovide a certain reference value for later raising policy and economic development to theInner Mongolia.This paper first hackles literatures on the relation between the domestic and foreignscholars on foreign direct investment and the host country or the investment development ofour country economy, reviews a few representative theory about the foreign direct investmentand economic growth, and then deeply analyzed the status from the utilization of foreigndirect investment in Inner Mongolia development stage, foreign direct investment scale,industrial investment, regional investment and investment way in the five aspects of thecurrent Inner Mongolia to use foreign capital situation.Based on above theoretical research and current situation of foreign investment in InnerMongolia, combining with the existing theoretical research, absorbing and drawing a betterempirical analysis method, using empirical analysis, this text discusses the positive effects onthe foreign direct investment to the economic growth of Inner Mongolia. Firstly thecorresponding data has been processed according to the2000-2010the foreign directinvestment and Inner Mongolia GDP data, and the gray connection model has been established by using the processed data, we obtains the gray correlation degree of0.603,which means the correlation is relatively high. Through the coordinating inspection analysis,a long-term equilibrium relationship exists between the internet direct investment andeconomic growth in Inner Mongolia. And when the foreign direct investment increases of1percentage points, economic growth will increase by0.525percentage. The test results ofGrainger causality shows that the foreign direct investment is the cause to promote economicgrowth, but economic growth is not the Grainger reason to explain the increase of foreigndirect investment inflow. Variance decomposition analysis found: when it is stable, foreigndirect investment ‘s contribution to economic growth reached about55.71%. Finally, on thebasis of the theoretical analysis and the empirical analysis, some related suggestions abouthow Inner Mongolia better to attract foreign capital and utilize foreign capital, according tothe introducing status of foreign capital,.

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Foreign Direct Investment and Environmental Pollution

On 09/10/2014, in Economics papers, by rain

As China’s economy continues to develop, continues to expand the scale of foreign direct Investment to China’s Economic growth impetus has played an important role, but at the same time, but also to China’s ecological environment have a certain negative impact on the environment as awareness of the protection of the continuous enhancement of capital flows and Environmental problems have become increasingly common concern from the community。This paper reviews in recent years on foreign direct Investment and the relationship between Environmental research, analysis of the reform and opening up since China’s utilization of foreign direct investment in the total change, with regional distribution of Environmental pollution and industrial distribution and an analysis of the situation, and then use our 29 Provinces and municipalities (excluding Tibet and Chongqing) of the 1992-2006 annual FDI data and indicators of environmental pollution, constructed an econometric model, a panel co-integration analysis and Granger test, this test between FDI and environmental pollution The correlation between the results of the study show that in the long term in industrial emissions and foreign direct investment, regional industrial solid waste and emissions of two-way foreign direct investment existence of the Granger Causality, and in the short term, the only industrial solid waste Emissions of foreign direct investment is the Granger causes at the same time this paper, a simple regression model, FDI and environmental indicators (mainly industrial waste emissions) to carry out further empirical analysis, the results were consistent with the Conclusion.Finally the article on China’s future in the introduction and utilization of FDI, how to avoid causing serious environmental pollution made the following policy recommendations: active participation, improvement of international legislation and build China’s Environmental Protection green barriers, vigorously develop the environmental protection industry, and promote the upgrading of the industrial structure and improve the structure of foreign investments in strengthening international exchanges and cooperation, environmental regulations play a restrictive role, effective control of environmental pollution, strengthen governmental supervision, and strengthen the environment for foreign investment Management and supervision system.

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An Analysis on FDI Technology Spillovers of Industrial Economy in Hubei Province

On 04/10/2014, in Agriculture, by rain

This paper’s object of study is technology spillovers effect of industry in Hubeiprovince.Since carrying out the reform and opening up policy,Hubei province has attractedmore and more FDI.At the beginning,the purpose is to make up the lack of domesticfunds,while later it is gradually shifted to implement the “market for technology” strategy.Developing countries work for more of FDI,one of the important reasons is to get thebenefits of spillovers of FDI.However,a lot of studies indicate:the spillovers of FDI can bepositive or be negative,and the number of spillovers is affected by lots of factors.This paper’s foundation is the theory of endogenous Economic growth,which discoursthe concept,pathway,factors of technology spillovers.And then,It studies the object fromthe angle of industry and city using panel data,and it produces unanimous conclusion inthese two angle from the result,which can explain that FDI has produces technologyspillovers effect to the output of domestic Enterprise.But at last,the most significantcontribution to demostic Enterprise is its labor force and capital.And then,this paper testsdifferent factors to the effect of spillover.It can see that smaller technology gap,moderatecompetition of FDI,R&D of demostic company and the personnel engages in scientificand technological activities can promote technology spillovers effects,but the level ofhigher Education and financial support can not promote effectively the result of theoccurrence.It can also conclude that FDI which comes from Hong Kong,Macao,Taiwancauses more obvious effect than other regions.Finally,It will show some suggestionsagainst the above analysis.

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The Technical Spillover Effect of FDI on the Human Capital

On 04/10/2014, in Finance, by rain

When foreign direct Investment influences the economy of host country, there aretwo main ways: capital and technical spillover effect. The technical spillover effect offoreign direct Investment is an important way for host country, especially the developingcountries, to get the world advanced technology and catch up with the developed countries.China, as the largest developing country in the world, compared to other counties may paymore attention to foreign direct investment. Furthermore, there is much factor affects theproduce and level of technical spillover effect of foreign direct investment, but the humancapital of the host country is particularly important.In this research,we will study while the human capital of Shandong province effectsthe technical spillover effect of South Korea’s direct investment or not. On the base ofC-D production function, from the empirical analysis we know South Korea’s directinvestment has no visible technical spillover effect in Shandong province;but the effectwill happen when the human capital of Shandong province takes part in. Therefore,inorder to make better use of the South Korea’s direct investment to improve economy andtechnology of Shandong province,we should pay much attention to the addition of humancapital of Shandong province.

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Locational Choice Trends of Foreign Direct Investment in China:1984-2009

On 04/10/2014, in Finance, by rain

Since reform and opening, China has made remarkable Economic achievements,absorpting and utilizing a large number of foreign direct investments (Hereinafterreferred to as FDI). But review the history of attracting FDI, we can see China attractslittle FDI in the beginning of the reform and opening, but after the strategy of “marketfor technology” putting forward in1992, attracting FDI has risen sharply. Afterjoining in the WTO, FDI inflow presents a new phenomenon. While the regionaldistribution of FDI in China’s domestic is also very uneven, showing east high westlow; furthermore, in the same area, the situation of attracting foreign Investment isdifferent at different times. This paper attempts to research locational factors whichinfluence FDI locational choices, and identify the trends of locational factors affectingFDI locational choices, and then through the relationship of certainty to recommendlocal governments to develop policies to better improve the locational factors toattract more FDI.This paper uses theoretical and empirical analysis, and as a city-sectional studyto explore the relationship between different locational factors and FDI locationalchoice, as well as changes in this relationship. The results of this study show that: Thewhole country: per capita GDP (pgdp), incentives, the number of students in collegesand universities and per capita wages the impact of FDI showed a gradual increasingtrend; wastewater treatment compliance rate (wastewater) and FDI locational choiceof a negative correlation, and this relationship was apparent to the third stage; cargo ofthe FDI locational choice of showing the first increase and then decreased, butremains positive relationship. The GDP growth rate (gdpg) of the FDI locationalchoice has no significant effect. East: pgdp, wage impact of FDI, as the case with thecountry. Policy, student locational choice for FDI influence increases firstly and thendecreased, cargo impact of FDI from scratch and then no process. Wastewater, gdpgon the locational choice of FDI has no significant effect. Central Region: policy,student and wage on FDI locational choice of the positive impact in the graduallyincreasing, pgdp, cargo starting from the second stage of locational selection of FDIhas a positive impact, and this effect in strengthening the relationship. Wastewater,gdpg on the locational choice of FDI has no significant effect. West: all the factors inthe first and second stages of FDI location choice are not affected. The third stage isonly cargo, student on the locational choice of FDI have a positive impact, while thewastewater of the locational choice of FDI have a negative impact. Conclusions of this study has an important revelation to local governments,especially in the economically backward central and western local government, toimprove the location factors to attract FDI to improve the ability to accelerate localeconomic development and narrow the gap between the regions.

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The Empirical Research on the Impact of Urbanization on the Foreign Direct Investment

On 04/10/2014, in Finance, by rain

Urbanization is the only way to achieve modernization for a country or region,and whether the rate of urbanization is reasonable depends on the coordination degreebetween urbanization and Economic and Social development, so urbanization will bean important Economic growth point to drive the next round of developmentof China’s. While foreign direct Investment affects formation of the city mainlythrough capital effects, spillover effects, system changes effects and so on. Theintrinsic relationship between urbanization and FDI attracted scholars’ extensiveresearch. Firstly, this paper explain how FDI advances urbanization, how urbanizationaffects FDI, and the internal theory base like the agglomeration economies betweenFDI and urbanization. Next, while differing from the traditional measure which issingle-indicator method, it selects comprehensive strength of urban of the267citiesfrom China and foreign direct Investment as a research object, use the way of analytichierarchy process to calculate the overall strength of the cities’ value which reflectsthe degree of urbanization level better. Further, it chooses panel data to conduct thetwo-stage least squares of simultaneous equations, which proves that the mutualpromoting effects between FDI and urbanization, and demonstrate that the importanceof urbanization scale to attract FDI, such as over-urbanization may hinder theabsorption of FDI. Finally, this paper concludes the policy implications about FDI andregional urban promotion.The main conclusions of this paper will be listed follow. First, there is a closecorrelation between urbanization and foreign direct Investment. The regressionanalysis of panel data shows that the higher the level of FDI, the higher the level ofurbanization. Conversely, raising the level of urbanization will also attract FDI. Thereexists a significant positive correlation between them. Also, the size of urbanizationscale has a profound impact to the attraction of FDI, and excessive overall strength ofurbanization will impede the absorption of FDI. Second, the optimization of industrialstructure promote Agricultural non-Agricultural, thus further the development ofurbanization. At the same time, increased government spending has a positive effectof urbanization. Third, market openness has a negative effect on FDI, mainly due tothe increase of the state-owned enterprises in the GDP output. They indicates thatChina’s industrial enterprises dominated by state-owned, which would weaken the competitiveness of foreign investment.

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Study on the Incentive Effect of Preferential Tax Policy on Foreign Direct Investment in China

On 04/10/2014, in Finance, by rain

China began to make use of FDI, which is short for Foreign Direct Investment, in1979when we started to open to outside. During the past twenty two years, FDI benefitsChina’s Economic development and is helpful to improve the pareto efficiency.Tax policy,as important factor and measure of macro-control, has great incentive effect on FDI. In thepast years, China offered special preferential tax policy to FDI and oriented to certainlocation. The new Law of Corporate Income Tax was carried out in March2007. Facingthe challenge of intense competition of international tax, many researchers begin to thinkabout whether the strategic readjustment of Corporate Income Tax will affect absorbingFDI, and how to improve related policy. This is what this paper mainly focus on as well.So this paper firstly analyze why host country need FDI, why MNC are willing toinvest outside and which location aspects are taken into account, the necessary of usingpreferential tax policy to encourage FDI by related FDI theory. What is more, chapter3introduces the evolution and current situation of FDI and related Corporate Income TaxPolicy.This paper also set up an econometric model basing on the panel data of44citiesduring1989-2009and prove that the preferential tax policy has significant effect on FDIindeed, especially in midland. However, this effect is no longer as strong as before ineastern cities. To sum up, The New Corporate Income Tax does have negative effect onFDI, but the negative effect is limited. At last, this paper puts forward five suggestions oftax policy to encourage FDI and optimizing the structure of FDI.