Productivity Effects Of Bidirectional FDI In China's Service Industry Under Environmental Constraints

Bidirectional FDI has become an important strategic choice for the majority of countries to participate in the international division of labor,adjust to the allocation of resources and enhance the international competitiveness of industry under the background of economic globalization.Meanwhile,the dominat position of the service has been further strengthened by the trend of global service economy.In fact,the relevant statistical data also showed that the trend of service globalization has become increasingly distinct,so the focus on global FDI has been changed from manufacturing industry to service industry.Therefore,the research about the impact of FDI on the productivity of service industry has gradually become one of the important academic subjects.Unfortunately,the researches about the impact of FDI on the productivity of service industry are almost limited to one-dimensional perspective and concentrated in the impact of service FDI on the productivity of overall economics or manufacturing.Meanwhile,the conclusions were not consistent.The environmental factors haven't been given priority to in the existing literatures when it comes to measuring the Total Factor Productivity in the service industry,which not only overestimate the true performance of the service industry but also mislead governments and other policy-making bodies.Given this,in order to reveal the productivity effects of the service industry under the environmental constraint,this dissertation based on the interactive development of the services bidirectional FDI will integrate environmental factors into the service sector productivity research system to investigate the impact of FDI on the productivity of service industry from the double-dimensional perspective.Firstly,this dissertation analyzed the current status of the interactive development of the China's service industry.The results are as follows: the area distribution of bidirectional FDI in China is extremely unbalanced,especially the scale and proportion of bidirectional FDI to European countries;there is a serious imbalance between the growth rate of the service IFDI and service OFDI,so the bidirectional investment structure needs to be improved;the proportion of service bidirectional FDI to total global service bidirectional FDI is still too low when compared with the developed countries';the proportion of Outward Foreign Direct Investment to Inward Foreign Direct Investment in the service sector is far behind the developed countries;meanwhile,the industrial structure of service FDI is too concentrated.Causality test found that the service IFDI can promote the service OFDI in the short term,but the service OFDI will likely be driven by service IFDI in the long term.On the theoretical level,this dissertation constructed a mathematical model to analyze the productivity effects of service bidirectional FDI.The results are as follows: the marginal production cost of the host countries' service product was reduced by the service Inward Foreign Direct Investment,which can promote the service sector to improve productivity levels through the effects of resources reallocation within industry;the service sector produce the service products in the host country through Outward Foreign Direct Investment,which can promote the service sector to improve productivity levels by the learning effects regardless of whether the service products are intended for the consumer market of the host country or a third country market consumption.The Service Inward Foreign Direct Investment offer favorable conditions to the Service Outward Foreign Direct Investment through the foreign technology spillover effects,which can enhance the OFDI self-selection capabilities of the host country.At the same time,improving the ability of service OFDI can also boost a country's ability to withstand external debt and enhance a country's economic strength,thus attracting more services Inward Foreign Direct Investment inflows.In the above context,we believe that the interactive development mechanism of services bidirectional FDI can be summarized as follows: Service Inward Foreign Direct Investment?improving the productivity of the service sector?self-selection effect?improving the ability of services Outward Foreign Direct Investment?investment learning effect?improving the productivity of the service sector?enhancing the overall economic strength of the host country?attracting more services Inward Foreign Direct Investment inflows.In addition,this dissertation also studied the theory mechanism of the impact of service sector FDI on the environment pollution.The results showed that the impact of services FDI on the environmental pollution depends on the combined effects of scale,structure effect and technology effect,which influence each other and interact with each other.In the aspect of empirical analysis,first of all,based on the regional and industry panel data of China's service industry,we apply the Malmquist-Luenberger productivity index to re-estimate the TFP growth of service industry in 31 provinces of China and services sub-sector industries,and conduct a comparative analysis to the regional and industry disparity of TFP change that was not taken into account of environmental factors.Then,we applied convergence theory to study the convergence of China's service TFP change from the perspectives of regional and industry disparity.The results showed that TFP,technical efficiency and technical progress in service sector not only exist significant heterogeneity among regions but also exist significant heterogeneity within the service industry.The growth of service Total Factor Productivity is mainly caused by technical progress,not to consider the fact that environmental factors overestimate the Total Factor Productivity of services.The rapid growth in service industry is at the expense of natural resource destruction and service environmental pollution in China.Meanwhile,the growth of the service sector has not really realized the transformation from extensive mode of growth to intensive mode of growth.The regional and industry difference of service Total Factor Productivity is gradually expanding.Secondly,based on the theoretical analysis and the model of previous literature and the panel data of service sub-sectors in China,we empirically tested the productivity effects of service bidirectional FDI.The results showed that the services IFDI can promote productivity growth through the effects of resources reallocation within industry and the services OFDI can also promote productivity growth through the effects of investment learning.Finally,in order to investigate the productivity effects of the service industry under the environmental constraint,the empirical analysis has been taken in this dissertation.We found that the service Inward Foreign Direct Investment does not play the significantly positive role in the productivity of service industry under environmental constraint.In other words,the service Inward Foreign Direct Investment in China does not support the pollution heaven hypothesis and the pollution halo hypothesis.But the service Outward Foreign Direct Investment has a negative effect on the productivity of service industry under environmental constraint,which indicates that it is difficult to transfer the pollution-intensive industries within China's service industry abroad through Outward Foreign Direct Investment,and it does not necessarily produce the effects of energy saving and emission reduction.The above conclusions will not only help us have a correct view of the real performance of service industry under environmental constraints,but also have such great practical significance as promoting the development level of service economy,facilitating the bidirectional strategic choice of “bringing in” and “going out” in the service industry and making the sustainable development policies to coordinate resource,environment and the service sector for a country's government and enterprises under the background of service economy.