Abstract:FDI has important effects on economic welfare of residents under the background of competition of attracting investment among local governments.Based on the data of Chinese cities,this paper has an empirical analysis on the relationship between FDI and economic welfare of residents under the background of competition of attracting investment among local governments from two aspects of overall and regional.The results are as following:FDI has positive effects on economic welfare of coastal residents;for local governments,their behavior of attracting is not only good for economic development,but also for promoting institutional environment of investment.In the inland areas,whatever FDI or preferential policies are not consistent with the conclusions to economic welfare of residents,on the contrary,in some areas,FDI could worsen the level of residents welfare