Research On The Impact Of Smart City Construction On Foreign Direct Investment

Foreign direct investment(FDI)is an important external force for the sustained development of China’s economy in the new era.Affected by the epidemic of the century,the world economic recovery is weak,the global foreign direct investment flow has continued to decline,China is facing severe challenges in attracting foreign direct investment,and it is increasingly urgent to find new momentum for attracting investment.At present,the innovative urban development model may be an important breakthrough in enhancing the advantages of attracting investment in the complex situation at home and abroad.Smart city as a new urban development model in the context of the new era,China began the pilot construction of smart city in 2012,and achieved remarkable results in construction and development,smart city construction has a significant role in promoting economic development and industrial structure optimization.Therefore,exploring the impact of smart city construction on foreign direct investment is of great significance to China to find new advantages in attracting investment and enhance new momentum for attracting investment.In order to better estimate the impact of smart city construction on foreign direct investment,this paper empirically studies the impact and mechanism of smart city construction on foreign direct investment based on the data of 256 prefecture-level cities in China from 2004 to 2019.Firstly,this paper adopts the multi-stage DID method to estimate the policy effect,and uses a variety of stability tests are used to ensure the stability and reliability of the regression results.Second,this paper finds that smart city construction has a heterogeneous impact on FDI.From the urban location level,the construction of smart cities located in the eastern coastal areas will attract more FDI to enter,but the construction of smart cities in the inland areas of the central and western regions cannot attract more FDI to enter.From the level of urban population size,whether it is a large city or a small or medium-sized city,the construction of smart cities positively affects urban FDI,but the marginal effect of the policy of small and medium-sized cities is greater than that of large cities.From the perspective of urban human capital heterogeneity,compared with cities with higher human capital,cities with low human capital have greater policy marginal effects.Third,this paper explores the mechanism of the impact of smart city construction on foreign direct investment.First,it is empirically found that the construction of smart cities can significantly increase the attractiveness of urban FDI through the effect of informatization;second,it is empirically found that the construction of smart cities can positively affect urban FDI through the effect of upgrading the industrial structure,that is,the policy effect can be indirectly through the effect of upgrading the industrial structure.Attracting urban FDI,but not through the rationalization of industrial structure;third,it is empirically found that the construction of smart cities can positively affect the growth of urban FDI through the technological innovation effect mechanism.Based on the empirical results,this paper puts forward corresponding policy recommendations.First,use the policy effect of smart city construction to improve urban intelligent infrastructure and provide new momentum for economic development and transformation.Second,promote the transformation and upgrading of urban industrial structure.Actively use the smart platform built by the construction of smart cities to help traditional industries transform and upgrade,and cultivate emerging industries and productive service industries.Third,promote the construction of smart cities in an orderly manner.According to the city’s own conditions,formulate a suitable smart city construction model.Fourth,give full play to the role of talent.Provide talents with a good employment environment and a good learning and R&D environment,and give play to the strategic supporting role of talents.