Research On The Effect Of FDI On The Manufacturing Industry Total Factor Productivity Growth Of China

Since the 1980 s,foreign direct investment(FDI)has become an important "accelerator" of economic growth in many developing countries and regions.Especially in the past 10 years,FDI has been the largest and most stable source of external funds in developing countries and regions.At the same time,FDI is also an important channel for international technology spillover.Many governments in developing countries,including China,believe that the technology spillover effect of FDI can enhance the technological capability and technology level of domestic enterprises and promote the growth of total factor productivity of domestic enterprises.In order to obtain the technology spillover effect of FDI,governments of developing countries have formulated and promulgated various preferential policies in favor of introducing FDI.As a developing country with the largest use of FDI,whether FDI has a technology spillover effect on China’s related industries and how the channels and mechanisms of technology spillover will work has been a hot issue that has been widely concerned by scholars.Using the panel data of domestic enterprises in manufacturing industry from 2003 to 2016 and adopting the stochastic frontier analysis method,in the paper we analyze the growth rate of total factor productivity of domestic enterprises in manufacturing industry and its decomposition variables: the change laws of technological progress,technological efficiency change,scale efficiency change and resource allocation efficiency change.Based on this,the paper empirically examines the spillover channels and transmission mechanism of FDI on the growth rate of total factor productivity and its decomposition variables of domestic-funded manufacturing enterprises by using panel data model,and selects four indicators,which are technology gap between domestic and foreign enterprises,industry concentration,market orientation of foreign enterprises and capital intensity of domestic-funded enterprises,to divide the whole sample of domestic-funded manufacturing sector into four groups.Group regression method was used to investigate the industry heterogeneity of FDI technology spillover channels and transmission mechanism.This paper draws the following three main conclusions:Firstly,from 2004 to 2016,the total factor productivity level of domestic enterprises in manufacturing industry has been rising continuously.There is obvious technological progress in manufacturing industry during the sample period,which contributes most to the growth rate of total factor productivity.Specifically,the annual growth rate of total factor productivity of domestic enterprises in manufacturing industry is 6.7%;Frontier technological progress promotes the growth rate of total factor productivity by 9.8% annually on average;The widening gap of relative frontier technology efficiency leads to an average annual decrease of 0.53% in total factor productivity growth rate of domestic enterprises in manufacturing industry;Non-economy of scale leads to an average annual decline of 2.09% in total factor productivity growth rate of domestic manufacturing enterprises in manufacturing industry;The deterioration of resource allocation efficiency results in an average annual decrease of 0.45% in total factor productivity growth rate of domestic enterprises in manufacturing industry.Secondly,the regression results of the whole sample of domestic capital sector in manufacturing industry show that:(1)FDI significantly promotes the growth rate of total factor productivity of domestic enterprises in manufacturing industry through horizontal correlation effect,while backward correlation effect has a significant negative impact on total factor productivity,and forward correlation effect has no significant impact on total factor productivity.(2)From the perspective of the transmission mechanism of FDI technology spillover channels,the horizontal correlation effect mainly promotes the growth rate of total factor productivity of domestic enterprises by promoting the technological progress of domestic enterprises and improving the efficiency of resource allocation.The backward correlation effect mainly promotes the growth rate of total factor productivity of domestic enterprises through technological progress,but the effect of backward correlation on the change of technological efficiency and resource allocation efficiency is significantly negative.Forward correlation effect mainly promotes the growth rate of total factor productivity of domestic enterprises through the change of scale efficiency.Thirdly,the heterogeneity of FDI technology spillover effect examined,there exists industry heterogeneity in FDI technology spillover channel and its transmission mechanism:(1)In the industries with small technology gap between domestic and foreign enterprises,horizontal spillover channel affects the growth rate of total factor productivity of domestic enterprises through technological progress,scale efficiency change and resource allocation efficiency change.In the industries with large technology gap between domestic and foreign enterprises,horizontal spillover channel affects the growth rate of total factor productivity of domestic enterprises through scale efficiency change.(2)In the industries with low concentration,horizontal spillover channel affects the growth rate of total factor productivity of domestic enterprises through technological progress,scale efficiency change and resource allocation efficiency change.In the industries with high concentration,backward correlation effect affects the growth rate of total factor productivity of domestic enterprises through scale efficiency change,and forward correlation effect affects the growth rate of total factor productivity of domestic enterprises through technological progress and scale efficiency change.(3)In the industries where the domestic-oriented foreign-funded enterprises are located,horizontal spillover channel affects the growth rate of total factor productivity of domestic-funded enterprises through technological progress,technological efficiency change,scale efficiency change and resource allocation efficiency change.Backward correlation effect affects the growth rate of total factor productivity of domestic-funded enterprises through technological progress,technological efficiency change and resource allocation efficiency change,and forward correlation effect affects the total factor productivity growth rate of domestic-funded enterprises through technological progress,technological efficiency change,scale efficiency change and resource allocation efficiency change.In the industries where export-oriented foreign-funded enterprises are located,horizontal spillover channel affects the total factor productivity growth rate of domestic-funded enterprises through technological progress and technological efficiency change.(4)In the industries with low capital intensity of domestic enterprises,FDI has no significant impact on the growth of total factor productivity of domestic enterprises.In the industries with high capital intensity of domestic enterprises,horizontal spillover channel affects the growth rate of total factor productivity of domestic enterprises through technological progress and scale efficiency change.Backward correlation effect affects the growth rate of total factor productivity of domestic enterprises through technological efficiency change,and forward correlation effect affects the growth rate of total factor productivity of domestic enterprises through technological progress and resource allocation efficiency change rate.