Foreign Direct Investment And Green Total Factor Productivity Growth In China

Since the reform and opening up,China has created a miraculous economic growth which attracts worldwide attention.However,behind the gradual rise of total economy in China,there are hidden worries,such as resource starvation and environmental degradation,etc.To solve this dilemma,Chinese government puts forwards a green development concept in the 13 th Five-Year Plan and emphasizes to adhere to the civilized development combined production growth,high-standard living and good ecology,and accelerate the construction of resource-saving and environment-friendly society.” To achieve a green development,it is significant to boost the economy through intensive development instead of extensive development,to promote the green total factor productivity(GTFP),and continue to expand its contribution to green growth.To promote the growth of GTFP,it needs to consider both the internal and external factors,such as the domestic independent innovation and international technology spillover.With the deepening of economic openness,the foreign direct investment(FDI)introduced by China is gradually expanding.The influx of FDI not only affects the economic development,but also makes a profound impact on the regional environmental quality.Therefore,against the background of economic transformation,it is of a great theoretical and practical significance to systematically explore the relationship between FDI and the growth of GTFP in China.(1)Main Contents of the Study1)This paper systematically constructs a theoretical analysis framework of FDI and GTFP growth in China.This paper defines the concepts and connotation of FDI and GTFP,and analyzes the influence mechanism of FDI on GTFP growth in theory from four aspects: capital formation,technology transfer,technology spillover and environmental effect of FDI.2)This paper statistically analyzes the current situation and problems of FDI and GTFP growth in China.This paper first analyzes the current situation and problems of using FDI both domestically and internationally with descriptive analysis.Then,taking the energy consumption index and environmental pollution index into the measurement framework as input factor and nonconformity output respectively,this paper measures GTFP in China with the non-radial,non-angle SBM model and DEA-GML index,and analyzes it from the time and region dimensions.3)This paper empirically studies the impact of FDI on the GTFP growth in China.Based on the provincial data of China from 2003 to 2014,this paper tests the influence of FDI on the GTFP and its regional differences by using “OLS + standard error”,system GMM,spatial error convergence and threshold regression,etc.4)This paper scientifically designs a long-term mechanism for FDI to drive the GTFP growth in China.Based on the theoretical and empirical research conclusions and combined with the actual situation of China,this paper designs a long-term mechanism of FDI to drive the growth of GTFP from three aspects: capital formation,technology absorption and environmental governance,and puts forward some policy suggestions to promote the sustainable growth of GTFP in China.(2)Main Conclusions of the Study1)During the period of investigation,the GTFP in China shows a decreasing trend with obvious periodicity and regional heterogeneity.The results show that the average growth rate of GTFP in China from 2003 to 2014 is-0.92%,which means that the GTFP of China is declining during the sample period generally with obvious periodicity.From 2003 to 2009,China's GTFP declined with the amplitude narrowing.From 2009 to 2014,China's g GTFP is on the rise.Meanwhile,from the decomposition of GTFP,the decline of green technology efficiency plays a significant role.In addition,there are obvious regional differences in the GTFP of China during the period of investigation,which declines along the coast,the border and inland areas.2)In general,the inflow of FDI has contributed significantly to the growth of GTFP in China.The results of system GMM regression show that,as a whole,the inflow of FDI has contributed to the growth of GTFP in China.This may be attributed to the advanced production technology,environmental technology and management experience brought by FDI through the demonstration-imitation,market competition,personnel mobility and industry relations,etc.,which lead the local enterprises to improve production technology,implement the cleaner production,reduce the energy consumption and environmental pollution,and optimize the industrial structure,to promote the green technology as well as its efficiency,thereby to promote the GTFP growth.3)There are significant regional differences in the impact of FDI on China's GTFP.The results of system GMM show that the influence of FDI on China's GTFP has obvious regional differences,and the performance of FDI in coastal areas is the most positive for the GTFP,followed by inland areas,while the positive role of the border areas is not obvious.The results of spatial error convergence regression show that the GTFP in China has a significant convergence,and the increase of FDI has a significant promotion on the convergence of GTFP in China.4)The influence of FDI on China's GTFP is significant with single threshold effect based on R&D investment,human capital and environmental regulation.The results of the threshold regression show that different R&D inputs,human capital and environmental regulation are the main reasons for the regional differences in the impact of FDI on China's GTFP,and there are single threshold effects in the impact of FDI on China's GTFP based on R&D investment,human capital and environmental regulation.The higher the level of R&D capital investment and human capital,the larger the positive impact of FDI on China's GTFP.It is also helpful to improve the level of environmental regulation moderately for the purpose of realizing the promotion of FDI on the growth of GTFP in China.5)To drive China's GTFP growth effectively with FDI demands a long-term mechanism of scientific.Specifically,it includes three long-term mechanisms: FDI to accelerate the capital accumulation,promote the technology absorption and avoid the environmental pollution.The long-term mechanism of FDI to accelerate the capital accumulation includes dynamic supervision mechanism,domestic enterprise growth mechanism and financial support mechanism.FDI to promote the technology absorption includes policy guidance mechanism,industry docking mechanism and personnel training mechanism.FDI to avoid the environmental pollution includes ecological warning mechanism,environmental regulation mechanism and coordination incentive mechanism.(3)Important Views of the Study1)GTFP is the main source of green economic growth,and an important indicator of the quality of China's green development.In the context of tightening of resources and environment constraints,to transfer the economic development from the extensive mode to the intensive mode and to promote the growth of GTFP continuously have been significant for China's economic transformation.2)To drive the GTFP and promote the green economic development,we need to consider both domestic and foreign factors,especially in the context of accelerating the pace of economic globalization and deepening the economic reform of China,we must give full play to the positive spillover effect of FDI on China's GTFP.3)Because of the differences of regional economy and society in China,the influence of FDI on the GTFP in different regions is also different.Therefore,it is necessary to fully integrate the characteristics of the local resource endowment and implement differentiated foreign investment strategies to effectively promote the growth of GTFP in China.(4)Policy Suggestions of the Study1)We should promote the green technological progress and enhance the green technology efficiency.We should introduce and digest the foreign advanced technology on the basis of strengthening the original innovation,to comprehensively improve the national technological innovation capability.At the same time,we should fully tap the potential of the existing technology resources to enhance the efficiency,so as to effectively promote the GTFP growth.2)We should establish a green development concept and co-ordinate the regional development.All regions should promote the local green development according to the local conditions with the orientation of green development.Inland areas should implement the “green rise” strategy and take the road of sustainable development.Areas along the border should adhere to ecological priorities and develop the ecological science and technology.Coastal areas should lead the optimization and upgrading of industrial structure,strictly control the access threshold of environmental protection,and accelerate the green economic development.3)We should raise the level of opening up and introduce the green foreign investment with high quality.We should comprehensively improve the level of opening to the outside world,as always,actively introduce and supervise the FDI,accelerate the mode of attracting foreign investment from “quantity orientation” to “quality orientation”,from “passive absorption” to “active choice” and attach a great importance to the environmental benefit of FDI.4)We should recognize the characteristics of regional endowment and adopt different strategies for attracting FDI.Areas with a strong absorptive capacity should actively introduce the green foreign investment with high quality and explore the best match point of foreign capital introduction and GTFP growth.Areas with a poorer absorptive capacity should carefully and selectively introduce the foreign capital,improve the absorptive capacity of the system to achieve the corresponding “threshold” on top,in order to give full play to the positive spillover effect of FDI on the GTFP.