A Study on determinants of foreign direct investment —— Evidence from China

Abstract

Foreign direct investment is an internationalization strategy by which the firm establishes a physical presence abroad through direct ownership of productive assets such as capital, technology, labor, land, plant, and equipment. Under the economic globalization, the economic relationship between all the countries becomes much closer, then the capital flow between countries grow much stronger, with Foreign Direct Investment dominating.Since the reform and opening up, the absorption of foreign direct investment has become an important economic policy of China. Nowadays, China is the dominant force in the world economy. China, as a significant market area with the fast development of investment, playing the central role in world trade and FDI activities. Moreover, the scale of FDI in China has been expanded continuously in the last few years, both inflow and outflow. Meanwhile, it has also brought valuable benefits to China.