The Influence Of OFDI On The Upgrading Of Industrial Structure From The Perspective Of Industrial Agglomeration

Since the reform and opening up,China has persisted in the strategies of “bringing in” and “going out”.Economic development has achieved remarkable results.The scale of foreign direct investment has grown by leaps and bounds,and it has become one of the world's second largest investors.While OFDI is booming,domestic economic development has entered a new normal.Economic development requires stable growth and optimized structure.However,the slow transition of domestic industries and overcapacity have become more serious.The status of China's industry in the global value chain is still low,and the upgrading of the industrial structure at home and abroad is imperative.Under these two backgrounds,combined with the current situation of China's industrial agglomeration,how to effectively use the increasing foreign direct investment to promote the optimization and upgrading of the domestic industrial structure is of great significance.Firstly,this article systematically summarizes and sorts relevant literatures.Domestic and foreign researches on OFDI and industrial structure upgrading are extensive and abundant.There are also related researches on the agglomeration effects of OFDI.However,it can also be found that few scholars have studied the relationship between OFDI and the upgrading of industrial structure in the light of domestic industrial agglomeration,which means,from the perspective of space economics.In terms of the geographical distribution of China's industries and OFDI,it is necessary to consider the factors of industrial agglomeration in the process of examining the relationship between foreign direct investment and upgrading of industrial structure.Based on this,this article will examine the relationship between outward direct investment and industrial structure upgrading from the perspective of industrial agglomeration to observe the effect of OFDI on industrial structure through industrial agglomeration.Secondly,the article analyzes the current status of OFDI development in China and the current status of industrial structure development.For OFDI,it mainly analyzes the current scale,industry distribution,and regional distribution of OFDI in China.With regard to the development status of industrial structure upgrading,this paper first defines the connotation of industrial structure upgrading and industrial agglomeration,and then measures the industrial structure measurement index and industrial agglomeration index,and analyzes the status of China's industrial development and industrial agglomeration.Then,we studies OFDI's transmission mechanism of industrial upgrading under industrial agglomeration,which mainly includes two transmission mechanisms,one is technical feedback effect and the other is scale economy effect.Based on the transmission mechanism,the simultaneous equations are constructed.Taking the provincial panel data of 2004-2016 in China as a sample,three-stage least squares estimation is performed for each country and sub-region.Finally,the paper summarizes the full essay.This paper demonstrates that: OFDI has no significant effect on the heightening of China's industrial structure and has a negative effect on the rational and balanced development of the industrial structure.The agglomeration economy of OFDI will restrain the high level of industrial structure,and some of the agglomeration economies will improve the imbalance of regional industrial development.OFDI in different regions and the effect of OFDI's agglomeration have different influences on the upgrading of industrial structure.Combined with the actual situation in China,this paper proposes relevant policy recommendations from OFDI to promote industrial upgrading.