Abstract: The large influx and spillover effect of FDI affect the urbanization of China，the level of human capital is an important condition for the effective absorption of FDI spillover effect. This paper, taking the level of human capital as the threshold, constructs a nonlinear panel model and a space panel Dubin model with 2004-2015 year provincial panel data, and empirically tests the threshold effect and spatial spillover effect of FDI on urbanization. The results show that the impact of FDI on urbanization will change with the change of human capital level, that is, when human capital is lower than the threshold value of human capital (7.2420), FDI has a hindrance to urbanization; when human capital is above the low human capital threshold value (7.2420) and below the high human capital threshold value (8.9550) in the following cases, FDI plays a promoting role in urbanization; when human capital is higher than the high threshold(8.9550), the promotion of FDI to urbanization is more significant, and there is a significant spatial spillover effect between FDI and urbanization in adjacent areas. The above conclusions have practical significance for promoting urbanization in China. The inspiration of the above conclusion is that the upgrading of human capital is becoming a restrictive condition for the process and quality improvement of urbanization in China.

Key words: FDI, urbanization, human capital, threshold effect, spatial spillover