The Impact Of FDI On China’s Technological Innovation Under The Background Of Institutional Opening

Innovation is the driving force of economic growth.Since the reform and opening up in 1978,FDI,as the main means to take advantage of external innovation,has been an important way to improve the level of technological innovation in China.Nowadays,with the increasing development of economic globalization,the degree of China’s opening to the outside world is deepening,and the breadth and depth of China’s opening to the outside world are significantly improved.In 2018,the Central Economic Work Conference proposed institutional opening for the first time,and in 2022,the 20 th National Congress of the Communist Party of China again pointed out the need to steadily expand institutional opening,which marks a new stage of China’s opening to the outside world.Institutional opening-up is the core content of China’s high-level opening-up in the new era.Different from the traditional opening-up based on the flow of goods and factors,it focuses more on deep-seated opening-up issues such as rules,regulations,management and standards.It actively participates in various multilateral and bilateral trade agreements around the world by benchmarking high-standard international rules.So as to break the institutional barriers restricting the free flow of domestic and foreign goods and factors,break the institutional barriers in economic operation,and accelerate the establishment of a new type of government-business relationship,optimize the business environment,expand the size of the domestic market,improve the quality of the domestic market,so as to attract more FDI into China,and give better play to the technological advantages and spillover effects of FDI.We will further enhance China’s level of technological innovation.Therefore,this paper aims to explore the influence of FDI on China’s technological innovation under the background of institutional openness.First of all,this paper analyzes the path of FDI’s influence on technological innovation and the mechanism of FDI’s influence on technological innovation under the background of institutional opening by combing the relevant studies on institutional opening,institutional factors influencing foreign direct investment and foreign direct investment influencing technological innovation.Secondly,it analyzes the typical facts of China’s institutional opening,China’s utilization of foreign capital and China’s technological innovation.Finally,by constructing mixed effects model and fixed effects model,the panel data of 31 provinces(autonomous regions and municipalities directly under the Central Government)from 2005 to 2021 are used to explore the influence of FDI on China’s technological innovation under the background of institutional opening-up.It is found that FDI significantly promotes China’s technological innovation under the background of institutional opening,and the conclusion is still valid after various robustness tests,such as controlling the endogenous problem with instrumental variable method and replacing the explained variables.In terms of heterogeneity,the effect of FDI on technological innovation is significantly different due to the different time of institutional opening and the different regions of institutional opening.The mechanism test shows that under the background of institutional opening up,the further optimization of domestic business environment,the further expansion of market size and the further improvement of market quality can attract more foreign investment to China,thus promoting foreign investment to better play its driving role in technological innovation and expanding the positive influence of FDI on technological innovation,so as to improve the level of technological innovation in China.Finally,based on the research results,corresponding policy recommendations are put forward.