Research On The Effects Of FDI On China's Total Factor Productivity

Nowadays,China's economic growth has entered a new normal.The TFP-driven economic growth mode relying on technological progress is the key to achieve sustainable economic growth in China.China's technological progress mainly comes from domestic R&D investment and international technology spillover of FDI,which is often more direct and convenient.Among the factors affecting total factor productivity(TFP),the level of financial development,trade openness,human capital,government expenditure and R&D investment of the host country will affect the technological spillover effect of FDI.The level of financial development in different regions of China is quite different.The level of financial development in the eastern region is higher than that in the central and Western regions.Therefore,it is necessary to study the impact of financial development on FDI Technology Spillovers on TFP growth in a subregional way.Firstly,this paper makes a theoretical analysis of the relationship between financial development,FDI spillover and total factor productivity.Secondly,it introduces the current situation of FDI and financial development in China.Finally,it draws the following conclusions: first,FDI mainly influences total factor productivity through technological progress,and FDI has no obvious effect on technological efficiency;second,from the perspective of subregion,FDI in the central region can improve TFP by improving technological efficiency.The impact of FDI in the eastern region is not enough to enhance TFP,while FDI in the western region has no significant impact on technological progress,technological efficiency and TFP.In the threshold test of financial development level,we can see that there is a single threshold effect on the scale and efficiency of financial development in the whole country and the eastern region.The financial development level has the effect of magnifying FDI technology spillover effect on total factor productivity.