| Since China’s reform and opening-up in 1978,China has been implementing “Introduction” strategy of opening-up,putting in practice a series of measures to facilitate foreign investment and promote market opening,which have gradually optimized our business environment for China’s FDI and promoted a new round of high-quality,high-level new opening-up pattern.According to the latest statistics from the National Bureau of Statistics,China introduced 139 billion U.S.dollars in FDI in 2018,second only to the United States,becoming the world’s second largest foreign inflow country.FDI is one of the ways of opening-up to introduce advanced technology.The international technology diffusion caused by FDI between the home country and the host country can be achieved through the international technology transfer effect and the international technology spillover effect,and local enterprises in host countries can obtain scarce production,management resources such as advanced technology,intellectual capital and management concepts in the process of technology diffusion.The host country(region),especially the developing country that introduced FDI,can increase the country’s capital stock and make better use of its “latecomer advantages” to introduce and digest foreign brilliant operating resources and advanced technology knowledge capital,even provide better employment opportunities.These will have a certain degree of positive impact on the technological absorption,technological progress,and improvement of total factor productivity of the host country(region).While developing the scale and quality of FDI in China,it is necessary to optimize the country’s FDI and system policies in combination with Chinese overall institutional environment for the implementation of market-for-technology strategy.Institutional factors are an important external environment for a country to introduce foreign direct investment and achieve productivity enhancement.It is also a fundamental factor considered by the new-institutional economics school to determine a country’s(regional)economic growth.The technological absorptive capacity of local enterprises in the host country and the effective realization of the technological diffusion effect of FDI are all affected to varying degrees by the overall institutional environment of the host country;Institutional quality also affects the relationship between FDI and total factor productivity by affecting FDI inflow levels and location choices.Therefore,an in-depth understanding of the quality of the system,the relationship between foreign direct investment and total factor productivity,and the specific regulatory effects of the quality of the system will help China to improve the quality of the system and the foreign business environment to attract more high-quality foreign capital into the country.These will also help our country optimize the domestic market competition pattern and promote the digestion and absorption of advanced technologies by domestic enterprises,as well as localized transformation and innovation,and promote efficient achievement in the strategic goal of market-for-technology.Based on the theoretical analysis framework of FDI’s international technology diffusion theory and new institutional economics theory,this paper theoretically explores the role of foreign direct investment and institutional quality influencing China’s total factor productivity,and the relationship between institutional quality and FDI and TFP and the moderate effect of their relationship.The paper has made two theoretical hypotheses corresponding to the main effect and the moderating effect accordingly.The article measures the total factor productivity of 30 provinces in China from 2008 to 2018 as an explanatory variable,and decomposes the growth of total factor productivity into a technological progress change index and a technological efficiency change index.Regarding institutional quality and foreign direct investment as the core explanatory variables,the interactive terms of institutional quality and FDI are included into the econometric model and the regression coefficients of the interactive terms are to determine the existence and magnitude of the regulatory effect of institutional quality.Import dependence,intellectual property protection level and R&D investment are the control variables in the measurement model of this paper.On the empirical aspect,this paper uses the Hausman test model for endogenous problems.The model uses a static GMM model to conduct empirical research on the relationship between system quality,foreign direct investment,and TFP.The GMM model and the OLS estimation method recalculate the TFP and substitute the model for regression,and perform a robustness test on the empirical model.The results of regression analysis on the sample data show that: China’s overall system quality has a significant promotion effect on total factor productivity;system quality plays a positive regulating role on foreign direct investment and total factor productivity.The main policy implications of this article are as follows: Firstly,from an overall perspective,to improve China’s institutional policies,improve China’s institutional system construction,and create a more high-quality foreign business environment to attract more high-quality foreign investment into the country and finally promote China’s technological progress as a whole and increase the productivity of domestic enterprises.Secondly,from a regional perspective,the country should formulate appropriate institutional and investment policies in accordance with the respective levels of economic development and investment in the different regions,and encourage production and operation exchanges between different regions to promote the production capacity and economic balanced development.Thirdly,attach great importance to the accumulation of human capital in the country,increase investment in knowledge capital such as education and employment training,and develop more highquality knowledge-based and technical-type social talents.The improvement of the human capital structure can greatly enhance the technology absorption capacity and promotion of domestic and different regional enterprises local transformation and innovation of imported advanced technology and ultimately realize the qualitative leap of China’s overall and regional total factor productivity. |
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