OFDI、Environmental Regulation And China’s Industrial Structure Upgrading

With China’s economic development entering the "new normal",the upgrading of industrial structure has become one of the key measure to improve the level of comprehensive economic development.Meanwhile,the Chinese government has further increased the level of reform and opening up,and provided more convenient conditions for Chinese enterprises to go out on the basis of attracting foreign investment.More and more enterprises have begun to invest abroad,which makes China an ideal investor with more sustainability and flexibility in OFDI export.At the same time,with the heated discussion of the opposing hypotheses of "pollution shelter" and "pollution halo" on the environmental impact of FDI on host countries,OFDI environmental problems caused by the home country have also attracted increasing attention from all walks of life,especially the construction of ecological civilization and the further strengthening of the concept of green development under the background of the new era.As a policy tool,environmental regulation will play a more flexible and active role,and the effect of industrial structure upgrading and OFDI on industrial structure upgrading cannot be ignored.Therefore,the research on OFDI,environmental regulation and industrial structure upgrading under the same analytical framework is more in line with the practical needs.First of all,this paper theoretically deduces the influence of OFDI on China’s industrial structure upgrading.Furtherly we introduce environmental regulation factors,and subdivide environmental regulation into formal environmental regulation and informal environmental regulation,and analyze the influence of heterogeneous environmental regulation on China’s industrial structure upgrading and the regulatory effect of heterogeneous environmental regulation on OFDI promotion of industrial structure upgrading.Then,based on China’s provincial panel data from 2007 to 2017,we construct industrial structure upgrading index and heterogeneous environmental regulation intensity index,etc.Fixed effect model considering endogenous and dynamic panel model were used to study the influence of OFDI on industrial structure upgrading in China and the regulatory effect of heterogeneous environmental regulation on OFDI promoting industrial structure upgrading.The threshold effect of heterogeneous environmental regulation was tested by dynamic panel threshold model.Based on the analysis of theoretical mechanism and empirical research,the main research conclusions of this paper are as follows.First,OFDI promotes the upgrading of industrial structure significantly through marginal industrial transfer effect,reverse technology spillover effect,key resource supplement effect and related industry backward force effect.And the industrial structure upgrading has obvious path dependence,and the industrial structure level of the current period is significantly dependent on the industrial structure of the previous period.Second,formal environmental regulation and informal environmental regulation can significantly promote industrial structure upgrading.But,too high intensity of formal environmental regulation and informal environmental regulation will weaken the promotion effect of OFDI on industrial structure upgrading,and formal environmental regulation and informal environmental regulation have significant single threshold effect in this process.Third,the level of human capital,the level of economic development,the level of scientific and technological innovation and the level of domestic investment can significantly promote the upgrading of industrial structure,but the traditional level of infrastructure construction based on road traffic is no longer a significant factor to promote the upgrading of industrial structure under the background of economic development in the new period.Therefore,the following suggestions are put forward.First,furtherly encourage enterprises to "go out" and increase the support to investment enterprises by reducing the tax and credit interest rates of investment enterprises,relaxing credit constraints,simplifying the domestic examination and approval process and perfecting the legal environment for foreign investment.Second,establish a complete database of foreign investment inquiry,strengthen the research on the economy,culture and market of the host country of investment,and introduce the classic cases of success and failure to improve the success rate of foreign direct investment of domestic enterprises.Third,avoid the occurrence of "one-size-fits-all"phenomenon in the process of using environmental regulation,reduce the environmental regulation to below the threshold for investment enterprises with low pollution,and improve the effect of enterprises OFDI promoting the upgrading of industrial structure.Fourth,the flexible use of OFDI in different provinces to promote industrial structure upgrading,for the better economic conditions of the eastern and central provinces can make full use of OFDI to promote industrial structure upgrading,but for the economically backward parts of the central and western provinces need to rely mainly on environmental regulation to force industrial structure upgrading.The innovation of this paper includes the following aspects.First,putting OFDI,environmental regulation and industrial structure upgrading into the same analysis framework is not only a supplement to the existing research,but also can respond to the urgent problems facing China’s current development.Second,on the basis of studying the impact of OFDI and environmental regulation on industrial structure upgrading,we further analyze the regulatory role of heterogeneous environmental regulation on OFDI to promote industrial structure upgrading,and provide suggestions for the government to use environmental regulation tools flexibly and rationally.Third,on the basis of analyzing the effect of heterogeneous environmental regulation on OFDI promotion of industrial structure upgrading and regulation,we further test the threshold effect of environmental regulation,and use the dynamic panel threshold model to carry out empirical tests to make the results more in line with the reality.