Abstract Adopting the spatial correction system GMM model, this paper empirically studies the effect of urbanization on FDI. It is found that spatial auto-correlation exists in the level, rate and quality of urbanization as well as the quantity and quality of FDI which in the meantime create spatial spillover effect. The level and rate of urbanization both have promoted the growth of FDI in quantity, but not so in quality, while the quality of urbanization is conducive to the growth of FDI both in quantity and quality. These conclusions are also applicable to cities of county level in eastern China and to cities of both prefecture level and county level in central and western China. The level and quality of urbanization in cities of prefecture level and up have promoted the growth of FDI both in quantity and quality. Though it does not much increase the quantity of FDI, the rate of urbanization in such cities can significantly promote the quality of FDI. These conclusions are also applicable to cities of prefecture level in eastern China and cities of prefecture level and up in other areas.
2018, Vol. 35 
[an error occurred while processing this directive] | [an error occurred while processing this directive]
