Chinese OFDI And Industrial Upgrading

Outward Foreign Direct Investment(OFDI)and domestic industrial upgrading effect belongs to the study of home country effect of OFDI and has always been a hot topic in the international economic field.Since the implementation of the "go global" strategy in 2002,China's OFDI has achieved an exponential growth rate of 35.9 percent per year.The scale of China's OFDI continues to expand,and the investment industry is persistently widening,which makes China become a real OFDI country.With the continuous growth of China's OFDI,China's economy has entered the new normal.The shortage of resources and technology bottlenecks are becoming more and more prominent,which means that the industrial upgrading should be imminent.Based on such background,how to promote the domestic industrial upgrading by way of China's OFDI has become an important topic.Further theoretical research showed that the OFDIs from home country to host countries which were at different levels of development had significantly different impacts on home country's industrial upgrading,which provide a new perspective for this paper.On the basis of distinguishing the different OFDI host countries,this paper conducts a study on the domestic industrial upgrading effect of China's OFDI.Based on the realistic and theoretical background above,this paper conducts a study on the domestic industrial upgrading effect of China's OFDI from the perspective of country differences and mainly contains the following four core contents.Firstly,this paper establishes a theoretical framework on China's OFDI and domestic industrial upgrading.In this theoretical framework,this pater puts forward the different mechanisms of China's OFDI in the developed and emerging markets and in the developing countries on domestic industrial upgrading.Secondly,this paper decomposes industrial upgrading from the following two dimensions,namely industrial structure optimization and industrial efficiency upgrading,and calculates the industrial upgrading of China from 2003 to 2015.In the meanwhile,this paper also extracts the realistic characteristics of China's OFDI in different countries,and then this paper also conducts an empirical analysis based on the modified Chenery "Standard Structure"Model and by using China's inter-provincial panel data from 2003 to 2015.Thirdly,this paper calculates China's technological progress by way of DEA and SFA from 2003 to 2015.Through the mediating effect model,this paper makes an empirical test on the transmission path of China's OFDI to the developed and the emerging markets,and through the moderating model,this paper makes an empirical test on the moderate effect of China's digestion and absorption capacity.Fourthly,from the two dimensions of capital elements and labor elements,this paper calculates the elements flow of emerging industries of China during 2003 to 2015.Through the mediating effect model,this paper makes an empirical test on the transmission path of China's OFDI to the developing countries,and through the moderating model,this paper makes an empirical test on the moderate effect of China's institutional factors.Through the theoretical and empirical research,the following basic conclusions are obtained.Firstly,theoretical research shows that China can gain positive effects on the industrial upgrading from OFDI in the developed and emerging markets through path of technological progress,and the domestic digestion and absorption capacity play a role of moderating effect.It also shows that China can gain positive effects on the industrial upgrading from OFDI in the developing countries through path of marginal industrial transfer and R&D cost sharing,and the domestic institutional factors play a role of moderating effect.Secondly,China's industrial structure has been constantly optimized,and the industrial efficiency has also been greatly improved.Based on the modified Chenery "Standard Structure" Model,the empirical study shows that China's OFDI can significantly promote the domestic industrial structure both in the developed and emerging markets and in the developing countries.The result also shows that China can acquire positive effects on domestic industrial efficiency by way of the OFDI in the developed and emerging markets,but the effect is negative when the OFDI is in the developing countries.Thirdly,through path of technological progress,China can gain positive effects on the industrial upgrading from OFDI in the developed and emerging markets.To be exactly,it is the part of technological innovation that matters,not the part of technological efficiency,and this course of influence significantly exists in the eastern region,but not in the central and western regions.Further empirical research shows that technological progress plays a partial mediating role between China's OFDI in the developed and emerging markets and the domestic industrial structure optimization,while plays a fully mediating role between China's OFDI in the developed and emerging markets and the domestic industrial efficiency upgrading.Besides,the result also shows that the domestic R&D capital stock and the human capital stock have a significant moderating effect on the technological progress.Fourthly,through path of marginal industrial transfer,China can gain positive effects on the industrial structure from OFDI in the developing countries,and this course of influence significantly exists in the eastern region,but not in the western regions.Central region can gain positive effects on the industrial structure through path of the labor elements flow,but not the capital elements flow.Further empirical research shows that the capital elements flow path has a bigger positive effect on the domestic industrial structure.Besides,the result also shows that the moderating effect of the domestic institutional factor is not significant.At the present stage,China can't obtain positive effects on the industrial structure from OFDI in the developing countries through path of R&D cost sharing.