Abstract:Based on the theory of production function and the Lagrange equation related to the premise for deduction, the authors have deduced a new multivariate analysis framework theory model, and get an inner relationship mechanism about the foreign direct investment, industrial structure and urbanization. Then they build the panel simultaneous equation empirical model (SEM) of foreign direct investment, industrial structure and urbanization. And based on Stata econometric analysis software platform, with the experience of China's 23 large urban agglomerations data as sample, they respectively empirically test the whole of China urban agglomerations, the eastern, central and western areas, to compare the differences, and the empirical test results are consistent with the results of the basic theory model in terms of China's urban agglomerations. Through the study, they find that foreign direct investment and industrial structure promote each other; foreign direct investment and industrial structure improve the level of urbanization.