Research On The Influence Of Foreign Investment On China’s Automobile Industry

The rapid entry of foreign direct investment(FDI)has accelerated the development of world economy.Chinese companies also actively cooperated with foreign capital to achieve industrialization,which has made great progress in both product quantity and quality.Now,automobile industry as the mainstay industry,the value of this industry has more and more influence on the national economy and plays an important role in the process of China’s industrialization.Now,the most intractable problem that Chinese automobile industry facing is the technology spillover effect of FDI is more positive than negative? Under the complex economic environment,China as a very representative manufacturing country,the specific industry empirical analysis is of great significance for the enrichment of FDI theory.Domestic scholars also have conducted multi-angle empirical research on this issue.Based on the above reality,this paper analyzes the most fundamental problems for the development of automobile industry,and specifically explains how much the technology spillover effect of FDI affects the automobile industry? And what other influential factors are also involved in the process of foreign capital introduction? What are the current development problems of Chinese native automobile industry? Only when we have a clear understanding of our own problems,then we can make better use of the dividends brought by multinational corporations.Based on the integration of relevant investment theories,this paper try to analyze the effect of FDI in Chinese automobile industry,with latest industrial data from 2001 to 2017.First of all,analyzing the spillover effect of FDI on the whole automobile industry.In order to better master the development of domestic automobile enterprises,I divide this industry into two forms of capital: domestic capital and foreign capital.According to the empirical analysis results,the FDI has a positive effect on the whole automobile industry,and improves the output value of Chinese automobile industry.However,it has an obvious crowding out effect to domestic automobile enterprises,which means that the introduction of foreign capital does not help domestic capital obtain the endogenous technology and improve production efficiency.This paper will combine the empirical results and native automobile industry developing situation to detailedly explain the causes of crowding out effect,and finally give specific suggestions on how to make better use of FDI and propose the future development strategy to Chinese automobile industry.