Research On Industrial Upgrading Effect Of OFDI In The Belt And Road

At present,China's economic growth is slowing down and economic development has entered a new normal.On the one hand,China's manufacturing industry has to face the rising costs,such as labor costs.On the other hand,China's manufacturing industry has to face the plight of overcapacity.China's economy needs to transfer excess capacity,in order to achieve the industrial upgrading.Since The Belt and Road Initiative proposed,OFDI to the country along The Belt and Road increased rapidly.The OFDI has become an important way for Chinese enterprises to participate in The Belt and Road and international capacity cooperation.Over the past three years,has The Belt and Road made an impact on the Chinese economy?Will the OFDI under The Belt and Road promote China's industrial upgrading?These issues are in urgent need of research.This paper analyzes the different mechanisms of the OFDI to promote the industrial upgrading of China under The Belt and Road.That is,the effect of marginal industry transfer and the effect of reverse technology spillover.Then in the theoretical model,this paper uses the change of total factor productivity to describe the effect of reverse technology spillover and use the depreciation rate to describe the effect of the marginal industry transfer.And this paper also analyzes the speed of the industrial upgrading before and after the implementation of the Belt and Road with comparative static analysis.Model derivation shows that OFDI will promote China's industrial upgrading through marginal industry transfer and reverse technology spillovers.At the same time,based on the panel data of 137 companies participating in The Belt and Road from 2011 to 2015,this paper studies the effect of the OFDI on the upgrading of China's industrial upgrading under The Belt and Road by using the propensity score matching(PSM)and the difference-in-difference(DID).This paper also studies the data by region and ownership respectively.The main conclusions are as follows:(1)The OFDI under The Belt and Road has a significant positive effect on China's industrial upgrading,which can improve the labor productivity of enterprises and promote the optimization of China's industrial structure.(2)There is a difference in the effect of OFDI on industrial upgrading in different areas.There is a phenomenon that the effect of OFDI on industrial upgrading in eastern China is stronger than that in central or western China.But it cannot recognize whether the effect of OFDI on industrial upgrading in central China is stronger than that in western China(3)There is a difference in the effect of OFDI on industrial upgrading for different ownership enterprises.And there is a phenomenon that the effect of OFDI on industrial upgrading of private enterprises are stronger than the effect of OFDI on industrial upgrading of public enterprises,but the effect of OFDI on industrial upgrading of foreign-funded enterprises are not significant.In the end,this paper gives some policy recommendations according to the model conclusion and the empirical results.