Research On The Influencing Mechanism Of China’s FTZ On Foreign Direct Investment

In recent years,the Sino-US trade disputes and the increase of labor costs and land costs in my country have caused a great challenge of FDI in China.So seeking new impetus for the scale growth and quality improvement of FDI is urgent.As an important strategic deployment for deepening my country’s opening-up pattern,FTZ focuses on institutional innovation,and with its policies and measures to reduce FDI access restrictions and optimize the FDI environment,it has realized the introduction of "quality" and "quantity" of FDI.double lift.Nowadays,attracting FDI as an important goal of my country’s free trade zone construction has received extensive attention from the academic circles.Therefore,it is necessary to evaluate the introduction effect of the establishment of my country’s free trade zone and to explore its internal mechanism.In view of this,this paper focuses on the following two questions: First,does the establishment of FTZ significantly promote the inflow of FDI in the region? Second,what are the channels through which the establishment of FTZ can promote FDI? First of all,this paper systematically sorts out the previous literature on the interaction between free trade zones and FDI,and combines the institutional innovation measures of free trade zones and the theory of location selection of FDI to demonstrate free trade zone policies at the level of theoretical mechanisms.The implementation of this paper has an impact on foreign capital inflow;secondly,based on the unbalanced panel data of 287 prefecture-level cities(municipalities)in my country from 2009 to 2019,this paper conducts multi-period double difference regression,and uses a series of robustness tests to ensure the basic conclusions of this paper.At the same time,it also conducts heterogeneity test from the perspectives of different entry modes,different locations and different source countries of FDI.Finally,the moderation effect model tests the facilitation level of FDI access and the effect of industrial agglomeration,and the mediation effect model tests whether the improvement of regional innovation level is an effective way for FTZ to affect the inflow of foreign capital.The specific empirical analysis draws the following conclusions:(1)my country’s FTZ have an obvious positive role in promoting the inflow of FDI;(2)the establishment of FTZ has a positive effect on FDI from the joint venture model and FDI from countries along the "Belt and Road" and the positive promotion effect of coastal Free Trade Zones on FDI is more obvious;(3)Free Trade Zones can improve the level of FDI access facilitation through direct mechanisms,industrial agglomeration effects,especially manufacturing industry agglomeration The indirect mechanism of promoting the inflow of foreign capital by improving the level of regional innovation.Finally,this paper puts forward relevant policy suggestions based on the research conclusions based on the economic situation at home and abroad,and believes that the government and enterprises could expand FTZ from the perspectives of further exploring investment facilitation institutional innovation,clarifying the orientation of industrial ecological agglomeration and improving the level of regional innovation.