FDI、Foreign Trade And Total Factor Productivity

With the global economy into a slow growth cycle,China’s economy has entered a low-speed development stage-the new normal.In the thirteen five plan,total factor productivity(TFP)has become an important driving force for China’s sustained economic development.The study shows that the spillover effect of Foreign Direct investment(FDI)and Foreign trade is conductive to the promotion of TFP.At the same time,China has realized that the extensive development of natural resources has reached the bottleneck and improving the level of TFP is one important means to make our economy sustainable growth.Therefore,based on the technology spillover and the new international division of labor,the author studies the relationship between foreign direct investment(FDI)and foreign trade for China’s total factor productivity and the characteristics of domestic investment,hoping to provide our country with sustained economic growth under the new economic norm to achieve the path,which has important practical significance and theoretical significance for further deepening economic reform and stable economic growth.Based on the relationship between FDI、foreign trade and TFP,the author uses the panel data of 28 provinces and cities in China from 1990 to 2015 and analyzes the historical development of FDI and Foreign trade.In this paper,the total factor productivity of China is measured by the Malmquist index method based on DEA and in this model,TFP growth rate is the explanatory variable,foreign trade and FDI are independent variable and research and human capital are control variable.Through the empirical analysis of this model,this paper has the following conclusions:Firstly,on the whole,FDI and foreign trade promote the improvement of China’s total factor productivity,but this degree of influence with the sustainable development of China’s economy has become smaller and smaller.China not only concentrates on the quantities of FDI but pay more attention on the quality of FDI as well.At the same time,the import and export trade in commodity structure have become increasingly reasonable.Secondly,from the sub-regional point of view,FDI and foreign trade have the gap on the total factor productivity in eastern,central and western China.As a result of regional imbalances,the total factor productivity in the eastern region is significantly higher than that in the central and western regions.Thirdly,in the view of the different periods,before and after the 2008 financial crisis,FDI and foreign trade on China’s total factor productivity has undergone significant changes.In the economic globalization today,China’s economic development has a closer relationship with international environment.Fourthly,human capital promotes the growth of TFP in China but to some degree,funding for scientific research weakens the growth of TFP(positive correlation after 2008).The improvement of TFP in China is a process of gradual accumulation,influenced by some of the current influencing factors and the lag.