International Direct Investment And Industrial Structure

With the further development of global integration, foreign direct investment (FDI) plays an ever-increasing important role in the world economic development. We understand that FDI can enhance the industrial competitiveness and boost the economic development in term of technical overflow, export rise, employment growth and industrial transfer etc. As a large developing country, China enjoys late-developing advantage, cheap labors force and huge customer base, but the competitiveness of its industries and the industrial structure are still weak. Without a complete effective industrial structure, the sustained development of China is out of question.China has come into a new era with respect to the usage of FDI. The number one obstacle is not capital shortage, technical backwardness but industrial structure defect. With the introduction of "industrial structure variable", the paper starts from the discussion of theories concerning FDI and industrial structure, then set up an econometric model and make a positive analysis on the data concerning industrial sfructure, FDI and gross domestic product. The outcome tells us that when we talk about FDI we should consider whether FDI could improve industrial structure.The feature of this paper is that it adopts a new approach to the research on the time-honored topics, combines FDI and industrial structure theories together and conducts positive analysis on the relative economic data. Thus it provides a solid theoretical basis and policy suggestions for the use of FDI.