STUDY ON THE SPATIAL DISTRIBUTION OF FDI OF DIFFERENT INDUSTRY AND ITS AFFECT ON LOCAL ECONOMY DEVELOPMENT

Recently, FDI entering China continuously rises and has entered all the fields opened to FDI. The impact of FDI to local economy depends on the industry of the companies which bring FDI. This paper attempts to do some research on the spatial distribution of FDI of different industry. We have chosen six main industries. First, location quotient to be used to map the relative spatial distribution of FDI entered to the six main industries to show the favor location of every industry and indicates the foreign investors' favor industry in different province. Then the Shift-share method has been introduced to analyze the dynamic process of FDI of the six industries in every province. Industry structure effect index and competition effect index, computed through SSM, have showed that the industry structure of FDI is not satisfying wherever the province is in the east or in the west. The conclusion is: In the east where most FDI entered, the industry structure of FDI will no more help to promote the local economy develop, which is to say the industry structure of FDI there have to be changed. In the west, although the industry structure effect is not remarkable, the main problem here is deficiency of capital and the scarcity of FDI. And what we have done is to show somehow the impact of FDI to local economy. Because of the spatial distribution of FDI, especially FDI of different industry, its impact to local economy also has spatial variation. And to a given region, wherever the amount of FDI is large or small, the impact exists and the impact depends on the industry structure of FDI.