Study The Influence Of Taiwan Direct Investment On Fujian Industrial Structure Upgrade

Fujian industrial structure upgrade has made some progress after the reform andopening-up. In the face of increasingly stringent requirement of industrial structureupgrade, Fujian area absorptive capacity laies a solid foundation, and the newharmonious relations across the Taiwan straits provide a huge opportunity. Sinceusing Taiwan direct investment is one of the motive for Fujian industrial structureupgrade, then if Taiwan direct investment has a role in promoting Fujian industrialstructure upgrade now? The promoting effect is affected by many factors, areaabsorptive capacity as one of the key factors, whether has the positive influence onTaiwan direct investment promoting Fujian industrial structure upgrade? Based onabsorptive capacity, research the influence of Taiwan direct investment to Fujianindustrial structure upgrade is advantageous to abundantly study on the relationshipbetween FDI and industrial structure upgrade, and provide guidance for Fujianscientifically using Taiwan direct investment.This paper builds a comprehensive evaluation index system, using data from1990to2011in31provinces to analyse current situation of the impact of Taiwan directinvestment on Fujian industrial structure upgrade by the factor analysis method firstly.Secondly, using Taiwan “Economic Investment Commission”and Fujian statisticalyearbook data from1991to2011, adopt regression model by Eviews to do empiricalstudy. The results show that Taiwan direct investment plays a weaker role inpromoting Fujian industrial structure upgrade. Third, using data from1993to2012in24areas such as Fujian, Jiangsu, Guangdong, adopt dynamic panel threshold modelby Stata to do empirical test. The results show that further promote the areaabsorptive capacity such as technical innovation ability, human capital level, andopening degree is beneficial for Taiwan direct investment to promote Fujian industrialstructure upgrade. In conclusion, the acceleration of Taiwan direct investment toFujian industrial structure upgrade remains to be further promoted, and it mainlylimited to the lower area absorptive capacity.According to the results, this paper puts forward some suggestions. We should expand the scale of the Taiwan direct investment, and improve the quality of Taiwandirect investment. In the same time, we should strengthen the area absorptive capacityincluding technical innovation ability, human capital level and opening degree.