A Study On The Effect Of Fiscal Decentralization And FDI To China Green Total Factor Productivity

Science and technology constitute the primary productive force.The promotion of green total factor productivity has become the key to promote the sustainable development of China's economy.As the internal engine to promote the development of the national economy since the reform and opening up.Fiscal decentralization is well-connected with green total factor productivity.The tax system reform,which began in 1994,has given local governments a great incentive to participate in economic activities,political centralization and economic decentralization system changed the way of resource allocation,has a far-reaching influence on the green total factor productivity growth.At the same time,China has become the largest foreign direct investment inflow country in recent years,foreign investment has become an important external force to promote regional economic growth.Foreign direct investment caused serious environmental pollution problems as well as bringing the advanced production process.The mixture of FDI's rapid expansion and regional low-quality development have put forward new requirements about research of promoting green total factor productivity growth.From both inside and outside perspective,this paper discussed the mechanism of fiscal decentralization?FDI and its interaction on green total factor productivity,has a significant theoretical and practical meanings to further deepen the reform of the fiscal system,introduce foreign capital reasonably and promote the sustained and healthy development of the economy.Based on the provincial panel data from 2003 to 2014,the SBM direction distance function and ML productivity index method is used to calculate the growth rate of green total factor productivity and its decomposition items on the basis of comprehensive consideration of energy input and pollution output.The results show that the growth rate of green total factor productivity in China is slow,and the improvement of green technology efficiency is the main driving force of its growth.The level of green technological progress and green technology efficiency in coastal areas are higher than those in inland areas.Then the historical change and development status of fiscal decentralization and foreign direct investment is elaborated,and the direct and indirect mechanism of fiscal decentralization as well as FDI affecting green total factor productivity is analyzed.Based on the analysis of present situation and theoretical analysis,empirical analysis is carried out by using GMM method.The research shows that at the national level,the improvement of fiscal decentralization is not conducive to the improvement of green total factor productivity,mainly because the fiscal decentralization is not conducive to the improvement of green technology efficiency,and the promotion of green technological progress is weak.At the regional level,FDI in the coastal areas has a significant effect on the growth of green total factor productivity,which is mainly reflected in the improvement of green technical efficiency in the internal path.The fiscal decentralization of inland areas is not conducive to green technological progress and has a significant negative correlation with the growth of green total factor productivity.However,the decentralized interaction between fiscal decentralization and FDI in all areas can contribute to the growth of green total factor productivity.Finally,policy suggestions are made on promoting the sustainable development of the economy and the growth of green total factor productivity in the three aspects,such as strengthening the financial relations between central and local,improving the performance appraisal mechanism,strengthening environmental regulation,promoting industrial transformation and upgrading,broadening investment channels and optimizing the use of foreign direct investment.