The Influence Of Foreign Direct Investment On Adjustment Of Industrial Structure Of Shandong: Effect And Path And Policy

Since the reform and opening up, the scale and quality of foreign direct investment in Shandong Province have been developed and improved rapidly. The experience of30years’ reform and opening up in Shandong has shown that foreign direct investment plays a very important role in the development of the economy of Shandong. FDI provides the capital and technology and management experience needed in the building of Shandong’s economic. FDI has created employment opportunities and increased fiscal revenue in Shandong. On the other hand FDI has played an important role in adjustment and upgrade of Shandong’s industrial structure. This article selects the impact of FDI on the changes in Shandong industrial structure as object of study. This paper combines the theoretical analysis with empirical studies, using econometrics models to study the effects of importing foreign direct investment on the changes in Shandong industrial structure. Then we can find the effects of importing FDI on the changes in Shandong industrial structure from the research above. So we can adopt measures to make better use of FDI to promote the adjustment and upgrading of industrial structure in Shandong.First, this paper reviews the theory of FDI and the industrial structure, then analyses the positive and negative influence of FDI on the industrial structure of the host country. Second, this paper analyses the progress and characteristic of the industrial structure and FDI in Shandong, then summarizes the problems existing in them. We can find the investment intensity of FDI in secondary industry is the largest. Third, we use Granger causality test method to prove the causality relations between FDI and the change of three industries of Shandong. FDI is an important factor of affecting the change of industries. Then we estimate the degree of contribution of FDI on the change of industries. The influence of FDI on the adjustment of industrial structure is positive. Finally, this article sums up the routes of FDI on the adjustment of industrial structure in Shandong from capital accumulation effect and technology spillover effect and human capital enhancing effect and the changing effect of system. And we summarize the former research literature at home and abroad on this topic.Combined with the new situation in Shandong Province, this paper further suggests some polices and measures to improve the adjustment and upgrading of industrial structure effectively in Shandong on the basis of the above analysis, such as changing the structure of FDI, improving the level of human capital, perfecting the system of investment environment, coordinating FDI policy and industry policy.