Electronic Commerce, Transportation Services and Regional Distribution of FDI in China

Electronic commerce and transportation services play an important role in FDI (foreign direct investment) distribution in China. One region with higher developed electronic commerce and transportation services receives more FDI. FDI absorbed by one region of China is affected by other regions. This effect is also closely related with electronic commerce. This essay, based on the data of China from 2000 to 2007, analyzes the factors that affect regional distribution of FDI and whether FDI absorbed by China's eastern region crowd in FDI absorbed by the Mid-West China. The results are as the following: FDI absorbed by eastern China crowd in FDI absorbed by the Mid China, but does not crowd in FDI absorbed by the West China. Above a threshold, which requires the electronic commerce and the transportation services of a region reaches certain level, the crowd-in effect come into being.