Research On The Impact Of China Pilot Free Trade Zone Construction On Foreign Direct Investment

Since the establishment of Shanghai Pilot Free Trade Zone in 2013,China has built21 pilot free trade zones in six batches(hereinafter referred to as “FTZ”).At present,the gloom of Sino-US trade frictions has not gone away,and World economic recovery is difficult under the impact of a new round of COVID-19.In addition,Geo-conflict between Russia and Ukraine has led to the acceleration of the evolution of the world ’ s unprecedented changes in the past century,highlighting the challenges faced by China ’s international trade and investment.FTZ has shouldered a heavy responsibility since its implementation,one of which aims to become an important engine for the use of foreign capital through institutional innovation.In the economic operation,does FTZ attract FDI inflows and truly play policy effectiveness? There are differences in the level of economic development and resource endowment in different regions,so is there any difference in policy effectiveness?Based on this,this paper takes 18 Pilot Free Trade Zones as the research object to investigate the impact of FTZ on FDI.This paper first combs the research results and theoretical basis of FTZ and FDI and sorts out the measures of FTZ to attract FDI.Then,it analyzes the scale change of FDI in FTZ from the two perspectives of the flow change of FDI and the change of investment subjects.The data show that the average value of FDI in FTZ is significantly higher than that in the non-FTZ cities,and FDI in the early FTZ is mainly the sole-funded enterprises;this paper makes a descriptive analysis of the FDI structure of some cities in the early FTZs.The chart shows that FDI in Shenzhen and Zhuhai has gradually flowed to leasing and business services,and the proportion of FDI in tertiary industry is high in Shanghai.Then,based on the panel data of prefecture-level cities from 2000 to 2019,this paper takes the prefecture-level cities of the other 18 pilot FTZs except FTZs established in 2020 as the treatment group,and other prefecture-level cities without FTZs as the control group,and sets the policy virtual variables of FTZ as the explanatory variables,and the actual utilization of FDI in each city as the explained variable to measure the level of FDI.Taking the level of economic development,industrial structure,government intervention,labor costs,infrastructure construction,regional trade openness and other factors as control variables,this paper use the generalized composite control method(GSCM)to test the impact of FTZ on FDI and its differences by using.This paper uses multi-period DID method to test robustness,and controls the superposition of other economic policies to further test the robustness of the results.The empirical results show that FTZ has attracted FDI inflows,and its positive role in promoting FDI has become more obvious with time.The study further finds that there are differences in the policy effect of attracting FDI in FTZ.From the time trend,different batches of FTZ with different policy orientation have different effects on FDI.From the regional perspective,FTZs in the eastern region has a stronger role in promoting FDI,the policy effect in the central region is lagging behind,and the attraction of FDI in the western region has a downward trend;from the perspective of city size,FTZ attracts more FDI in first-tier cities.The lower the level of cities is,the stronger the plasticity is,and the more obvious the effect of attracting foreign direct investment inflows is.The test results of the multi-period difference method which controls other policy factors further verify the reliability of the above conclusions.From different development gradients,the positive impact of the coastal free trade zone on foreign direct investment is higher than that of the inland coastal free trade zone,while the border free trade zone does not show the attraction to foreign direct investment.