An Empirical Analysis of the Agglomeration Economy on the Regional Distribution of FDI

The choice of FDI location has never failed to lose its attention from the scholars. Recent academic research has focused on the effect of agglomeration economies on the space distribution of FDI. Taking Jiang-su Province as an example, this article exploits the FDI distribution between and within cities in the latest years, and then chooses 9 typical indexes at city level to empirically analysis the effects of agglomeration economy with the method of factor analysis and OLS regression analysis. The finding shows that the agglomeration economy due to urban development and the agglomeration economies due to industry cluster both have positive effect on the FDI location pattern, but the effect of the former is larger than the latter.