Empirical Research On The Influence Of FDI On Hunan’s Industrial Structure

With the continuous development of economic globalization, foreign direct investment has special effects on the economic development and industrial restructuring of the host country, especially the developing host country. China has made remarkable achievements in order to attract FDI, however, the mechanisms and the effects of FDI acting on industrial restructuring in the central and western provinces remain to be turned over. Does FDI have an effect on industrial structure? What extent and mechanism of FDI action on industrial structure? These issues have always been the hot spot of academic discussion and research. Therefore, the paper attempts to choose Hunan Province as the research object, and measure the specific impact of industrial structure of FDI from three industrial added value and proportion by empirical analysis.Firstly, the paper points out the positive and negative impact of FDI on the industrial structure of the host country by combing the theories of FDI, industrial structure and the relationship between FDI and industrial structure. Through the existing empirical literatures review the effect of FDI on Industrial structure, the paper summarizes the whole idea and direction of the studies. Secondly, the paper analyzes the development process and the composition of FDI and industrial structure in details. Then, the paper measures the impact of FDI on industrial restructuring of Hunan Province by using a linear regression model from the industrial added value and a panel data model from the proportion. Finally, the paper proposes some hypothesis to promote the optimization and upgrade industrial structure through the successful domestic and overseas experiences by using FDI to modify the industrial structure.The paper indicates that both the FDI and industrial structure of Hunan Province have maintained an overall increase in recent years, and FDI makes significant effects to the industrial restructuring in Hunan Province. In terms of the industrial added value, the introduction of FDI enhances GDP of three industries to some extent. In terms of the proportion, FDI prompts the proportion of primary industry declined slightly, the proportion of the secondary and tertiary industries rose slightly. In order to continuously improve the quality and effectiveness of the use of FDI in Hunan Province and give full play to the industrial restructuring, we should focus on the improvement of investment environment, optimization of incentive policies, strengthen of independent innovation, maintain of the industrial safety and other efforts.