A Research On The Impact Of Outward Foreign Direct Investment On The Quality Of China’s Manufacturing Industry Development

Since the reform and opening up,China has achieved a miracle of economic growth by relying on abundant resources to promote the development of the manufacturing industry.However,the extensive development has led to the overall low quality of the current manufacturing industry,with excess low-end production capacity and insufficient high-end supply,and a lack of competitiveness in the international market.The 20 th National Congress of the Communist Party of China once again proposed to adhere to high-level opening-up and accelerate the construction of a new development pattern.As a pillar industry of the real economy,the development quality of manufacturing is closely related to the construction of a modern economic system.Therefore,analyzing the impact of foreign direct investment on the quality of manufacturing development in the context of opening up is of great significance for the high-quality development of China’s economy.On the basis of a comprehensive review of relevant literature at home and abroad,this article applies theories such as foreign direct investment to systematically analyze the mechanism of OFDI’s impact on the quality of manufacturing development.It is found that foreign direct investment can promote the quality of manufacturing development through reverse technology spillover effects,industry correlation effects,industry transfer effects,industry competition effects,and demonstration effects.On this basis,this article first constructs an evaluation system for the quality of manufacturing development from four dimensions,calculates the manufacturing development quality index through entropy method,and analyzes the quality of manufacturing development based on this.By analyzing the four dimensional scores of innovation,green,openness,and structural optimization,it was found that the eastern region is far ahead,while the central region fluctuates around the average level.There is still significant room for improvement in the western and northeastern regions.The summary of the manufacturing industry development quality index shows that the score of 0.299 in the eastern region in 20 years is far higher than the national average of 0.223,0.232 in the central region is slightly higher than the national average,0.171 in the western region and 0.149 in the northeast region are both lower than the national average,with significant regional differences.In terms of the current situation of outward direct investment,the stock in 2021 is 84 times that of 2003,involving 28 industries.In the same year,the flow of outward direct investment in the eastern region is more than three times that of the total of the central,western,and northeastern regions,and the stock is four times that of the other three regions,indicating significant regional heterogeneity.On the basis of the above theory,we select the provincial panel data of 30 provinces and cities in China from 2003 to 2020 to construct the individual fixed effect model for benchmark regression.After the robustness and endogeneity tests,the heterogeneity analysis finds that OFDI has regional heterogeneity in promoting the development quality of China’s manufacturing industry.Through the mesomeric effect analysis,it finds that there is a mediation variable of technological innovation in its promotion effect.Finally,using the threshold analysis,it finds that there is a threshold effect of outward direct investment.The research conclusions of this article indicate that: firstly,OFDI has a significant promoting effect on the quality of manufacturing development in China.Secondly,OFDI can improve the quality of manufacturing development by influencing the level of technological innovation as a mediating variable.Thirdly,there is a threshold effect of OFDI in promoting the quality of manufacturing development,and the effect is significantly enhanced when the threshold variable exceeds the threshold value.Therefore,this article suggests that the government should increase support for foreign direct investment by enterprises and improve relevant systems;Enterprises should strengthen their own innovation capabilities and leverage OFDI to enhance the quality of manufacturing development through innovative investment channels and other means.