The Effects Of Chinese IFDI And OFDI On Industrial Upgrading From The Perspectives Of Regional Heterogeneity

With the continuous advance of economic globalization,the international economic transactions are getting more frequently.Being an important carrier of international industrial transfer,International investment will affect the industrial structure of the country whether you are host country or home country.In recent decades,China’s inward foreign direct investment and outward foreign direct investment have been developing rapidly,and China is in the critical period of economic restructuring.China’s industrial structure need to optimize urgently.Learning about the impact of China’s IFDI and OFDI on the upgrading of industrial structure is of practical significance.The paper combines the theoretical methods and empirical methods to research the topic.Firstly,the paper analysises the present situation and the development process of China’s IFDI and OFDI.Then the paper researches the influence mechanism of OFDI and IFDI to the industrial structure changes from theoretical aspect with the help of existing research literature.On the macro level,IFDI promotes the upgrading of industrial structure in host countries by influencing the demand structure and supply structure,industrial linkage effect,competition effect and technology spillover effect.OFDI promotes the upgrading of industrial structure in home countries by industry transfer effect,industry correlation effect,industry competition effect and reverse technology spillover effect.On the micro level,the resource-seeking IFDI,market-seeking IFDI and efficiency-seeking IFDI promote the upgrading of industrial structure.The resource-seeking OFDI,market-seeking OFDI Strategic-seeking and efficiency-seeking OFDI promotes the upgrading of industrial structure.Based on the theoretical analysis,this paper adopts the date of 30 provinces in China from 2004 to 2014 and then studies the impact of China’s IFDI and OFDI on the upgrading of industrial structure using improved Chenery model from the whole level and the sub-region level respectively.The results shows that:on the whole level,China’s IFDI and OFDI both promote the upgrading of industrial structure.The promotion effect of IFDI on industrial structure upgrading is greater comparing to the OFDI.On the sub-region level,The East area’s IFDI and western regions’ IFDI both has a positive effect on the upgrading of industrial structure,but the effect of the IFDI in the east area on the industrial structure is much greater than that in the central and western area.The eastern area’s OFDI has a positive effect on the industrial structure,which,however,is not significant in the central and western area.Finally,on the basis of the above conclusion,the paper offers suggestions for the government.