FDL, Labor Mobility And Regional Innovation Capacity Growth In The Perspective Of Dual Economy

Large inflows of FDI and large-scale mobility of labor between urban and rural areas aretwo important characteristics of Chinese factor market since the reform and opening up. Basedon the Dual Economy Theory, FDI inflows and labor mobility not only have underlyingconnections, but also present features different from classic dual economy model. It’s worthdoing some further research. Besides, since Endogenous Growth Theory has provided atheoretical basis for the "innovative production", it’s easy to question if there are interactionsbetween the capital, the labor and the regional innovation capability when both of them increasesimultaneously. Up to now, there are few researches on these issues, so this article aims to makesome complements to this academic field.Based on the relevant literature review as well as Dual Economy Theory and EndogenousGrowth Theory, this article studies the generality and specificity of FDI inflows and labormobility from the dual economy perspective with characteristic analysis and conflict analysis.According to results of previous studies, this article purports to look for interactions between theCapital, the labor and the regional innovation capability by both the mathematical model andempirical test.Studies show that FDI inflows and labor mobility are the realization and specialperformance of the Dual Economy Theory in China. Moreover, these two factors haveinteractions with the regional innovation capability growth. Those interactions are reflected inthe "production effect", the "spillover effect", the "feedback mechanism", and the "low-endlocked". Therefore, this article proposes the following countermeasures to the government:1.Adjusting the regional economic structure;2. Promoting the simultaneous development ofstructure adjusting and technique growth;3. Accelerating the transformation and upgrading ofindustries in coastal areas;4.Improving the quality of population.