Services FDI And Optimization Of The Service Internal Structure: Theoretical And Empirical Analysis

With the openning of service sector in China, the national correlation department had setedmany policies to direct the inflow of services FDI into knowledge-intensive mordern serviceindustry. This paper explores the mechanism and effects of services FDI to optimize the serviceinternal structure.This paper draws support from the research findings home and abroad about services FDI,theservice internal structure and the correlation between the two, explores the specific chanel oftechnology spillover which manufacture-related services has from the angle of industry linkage onthe basis of discussing capital effect, technology effect and income effct of services FDI tooptimize the service internal structure, and then examines the relevance between Services FDI andthe optimization of the service internal structure, in addition, tests the effects of services FDI tooptimize service internal structure in two steps through establishing channel testing model which isoriginated from Gravity Model of Trade with the data from1992to2011.The research indicates:services FDI can reform the traditional servisces and improve the development of modern services,optimize the service internal structure.The detailed conclusions are as follows:(1)There are long-term and stable relations between services FDI and optimization of the service internal structure,what’s more, the former can optimize the latter better;(2)The empirical tests indicates thatservices FDI can optimize the service internal structure through technology spillover effect andincome effect mainly and the effects of the latter are greater than the former, but the capital effect isnot significant. After the integration of empirical results and recent situation of services FDI andthe service internal structure in China, this paper puts forwards the following sugesstions:optimizethe enviroment in China for FDI and increase our efforts in introducing services FDI, then guidethe direction of FDI inflows correctly to utilize FDI reasonably. What’s more, cultivate talents inservice industry vigorously to reach the full use of technology spillover effect from FDI. In the end,increase disposable personal income to elaborate income effect from FDI.