Research On The Influence Of China’s Service Industry’s TFP On Its OFDI

Nearly more than a decade years,the inflow and outflow of global FDI has expanded rapidly,especially the scale of investment in the service industry has shown a strong upward trend.As the key to enhance the core competitiveness of the service industry,the growth of total factor productivity plays a vital role in the field of OFDI in services.At present,the field of OFDI has shown the trend that service is the dominate industry.And in the long run,investment will continue to flow to the service sector.The growing scale of OFDI in service industry has made it a hot issue in academic research.Combined with the development status of OFDI in China’s service industry,this paper chooses eleven industries with relatively large scale of OFDI in the service industry,and then systematically analyzes the influence of productivity on OFDI of service from the angle of cost-driven,export-oriented and industry-coordinated these three types of OFDI.At the same time,this paper uses the Solow residual method to measure the level of total factor productivity of China’s service industry,and makes a descriptive statistical analysis of TFP in service industry and the development of foreign direct investment respectively,then briefly analyzes the possible relationship between TFP and OFDI,found that the level of total factor productivity in the service sector is positively correlated with the scale of its OFDI.This analysis lays the foundation for the later empirical research.Based on the possible endogenous problems between the total factor productivity and OFDI,this paper chooses the system GMM empirical method to make empirical test.The effect of total factor productivity on OFDI of service industry is tested from the perspective of the whole and the sub-industry respectively,and obtained a significant test result.From the service industry as a whole,total factor productivity has a positive effect on OFDI,but TFP is not the only factor that influence OFDI.From the perspective of each industry,the results vary by industry.Then considering both theoretical and empirical analysis,the artical put forward following four suggestions topromote China’s service industry’s OFDI.First to enhance the total factor productivity level of the service industry to enhance its international competitiveness,next is to optimize the layout of OFDI in service industry combined with its total factor productivity,and then with the help of productivity to adjust the structure of OFDI and in the end play the synergistic effect of industrial integration to enhance the level of OFDI.