Regional Agglomeration and Spatial Evolution of FDI

There are some specific rules of spatial distribution of FDI. Majority of foreign enterprises are inclined to agglomerate in the same area. Based on the historical data of FDI in Jiangsu, this paper investigates the spatial evolution patterns of FDI. As the analysis of aggregate data result, the spatial distribution of FDI had experienced three evolutive stage, namely stochastic diffusion--from diffusion to agglomeration--agglomeration. A further study of industrial data reveals that traditional industry had experienced the evolution from agglomeration to diffusion, but emerging industry had evolved from stochastic distribution to agglomeration. The factors of production costs,externality of agglomeration economics and path dependence played crucial roles in the process of spatial evolution of FDI.