An Empirical Analysis Of The Influence Of China’s ODI On Domestic Industrial Structure

With the global economy in a sluggish recovery,there are still many challenges to overcome.While China is in the critical period of building a well-off society in an all-round way,it is necessary to upgrade the industrial structure in order to maintain sustained economic growth.Since 2013,under the "One Belt And One Road" strategy,the foreign direct investment of Chinese enterprises has been endowed with an important mission to regulate the domestic industrial structure.To explore whether China’s foreign direct investment in recent years has a positive effect on the upgrading of industrial structure,and how to conduct direct foreign investment in the future,providing policy support and financial protection for companies that are about to go or“going out”has become a focal point in the field of finance research.In the process of research,this paper firstly introduces the classical theories and literatures of the predecessors.Firstly,it lays a theoretical foundation for the study of the latter,secondly it finds the breakthrough point and innovation point for the research of this paper.The main body parts are divided into three parts: theoretical analysis,data statistical analysisand empirical analysis,and the impact of China’s odi on the upgrading of domestic industrial structure is studied.In terms of theoretical research,this paper sorts out the impact of a country’s ODI on the adjustment of industrial structure.On the micro level,starting from the different drivers of foreign direct investment,the impact mechanisms of different types of foreign direct investment on industrial restructuring are analyzed separately.In macro terms,this paper studies the transfer effect and competition effect of foreign direct investment on different industries in a country.The three aspects of the correlation effect are analyzed to try to find out the impact of foreign direct investment on the industrial structure of a country.In the statistical analysis part of the data,the paper first reviewed the development history of China’s foreign direct investment and several stages of China’s industrial structure change.There is a consistency in the development of foreign direct investment between China and the optimization of industrial structure,and various types of foreign direct investment.The development has also caused corresponding changes in the internal indicators of the industrial structure,which has determined that there is a certain correlation between China’s foreign direct investment and the upgrading of industrial structure.Finally,in the empirical research,this paper considers the spatial geography as a non-negligible factor.Instead of adopting the cross-section panel model used by the predecessors,this paper chooses the space panel model to study.Based on the panel data of 31 provinces in China from 2004 to 2016,this paper systematically analyzes the direct and spatial spillover effects of China’s ODI on the adjustment of domestic industrial structure from two perspectives: the heightening of industrial structure and the rationalization of industrial structure.The empirical results show that China’s foreign direct investment has a significant positive impact on the industrial structure’s heightening and rationalization,which proves that China’s foreign direct investment can promote the optimization and upgrading of the domestic industrial structure.After verifying the positive impact,this paper further uses the grey correlation analysis method to study the differences in the degree of relevance between China’s direct investment in different industries and regions and the optimization and upgrading of domestic industrial structure.The research results show that from an industry point of view,China’s industrial upgrading effect on foreign direct investment in the shipping,postal and storage,mining,and manufacturing industries is most obvious;from a geographical point of view,our country is for Latin America,Africa,and Asia.The effect of upgrading the industrial structure of foreign direct investment is obvious.On the basis of empirical research,this paper proposes policy recommendations from both the overall and specific types of investment in order to further create a good institutional and financial environment in the future so as to expand the scale of odi in China and further promote upgrading of domestic industries structure.