Research On The Influence Of Two-way FDI On The China's Service Trade Competitiveness

Under the new normal economic situation,China's service industry is facing the dual transformation of investment and trade.In terms of investment,China is in the strategic period of two-way development of foreign investment and inflow.Its identity has been transformed from a big country of attracting foreign investment to a powerful country of investment.As far as trade is concerned,the traditional service sector has gone,and the modern service industry,mainly based on technology and knowledge capital,has become the core of China's and even the world's future development.To this end,the government emphasizes to promote the structural optimization of trade in services and enhance competitiveness by expanding the opening up.Therefore,it is of great practical significance to study the relationship between two-xway FDI and competitiveness of trade in services.This paper mainly studies the relationship between competitiveness of service trade from the following three investment perspectives:IFDI,OFDI and two-way FDI.Through theoretical mechanism and quantitative model analysis,it analyses the role of competitiveness of service trade.The article is divided into six chapters:The first is the introduction,which mainly summarizes the background content,summarizes the innovations and shortcomings of this paper;the second chapter is the literature review,which summarizes the competitiveness of service trade and the research results of FDI and its relationship at home and abroad,and lays the foundation for the subsequent related research;the third chapter is the description of the current situation of service industry,first of all,the IFDI and OFDI of service trade and the passage chart of service trade The form of the table is analyzed concretely.Secondly,the competitiveness of China's trade in services is evaluated comprehensively by MS index,RCA index,CA index and TC index.Chapter IV studies the mechanism of IFDI and OFDI based on Porter's "Diamond Model" theoretical framework,and judges the impact of their joint effects on the competitiveness of trade in services from the perspective of coordination of two-way investment development.Five chapters empirically analyze the panel data of seven industries from 2006 to 2017,using NRCA as explanatory variables,IFDI,OFDI and their interaction as core explanatory variables for comprehensive FGLS regression.Meanwhile,the instrumental variable method is used to overcome the endogenous problem of core explanatory variables and make the results more accurate.Finally,the robustness test is carried out by replacing variables.On putting forward practical policy suggestions.The results show that IFDI and OFDI have significant positive effects on the competitiveness of service trade,while their interactions show negative effects.This also shows that the uncoordinated development of two-way FDI in China's service industry leads to the reduction of the competitiveness of service trade.At the same time,according to the investment in fixed assets in service industry(IFA)and technology input(RD),the competitiveness of service trade is reduced.The positive and negative effects indicate that the traditional service industry is gradually replaced by the modern service industry with technological content.In order to enhance the strength of China's service trade,we should increase the investment in technological capital and knowledge capital.Based on the above conclusions,the author proposes that the speed and direction of the two-way FDI development should be properly controlled while maintaining the support strength,so as to make the two coordinated development.At the same time,the government should increase the investment in human capital and knowledge capital in service industry so as to improve the competitiveness of the overall service trade.