Research On The Impact Of Foreign Direct Investment On China's Resource Misallocation

With the entry into the "New Normal",China's economy is facing multiple pressures,such as the pressure from resources and environment.In the past,the extensive mode of economic growth was not only unsustainable,but also caused by the misallocation of resources,which has become an important factor restricting China's productivity growth and economic growth.How to improve the mismatch of resources has become one of the important issue to be solved urgently in the process of transforming the mode of economic development and realizing sustainable development in China.Under closed conditions,the improvement of resource mismatch is mainly achieved by optimizing the flow and allocation of production factors such as capital and labor within a country.Under the open conditions,resources can not only flow within a country,but also cross national boundaries and optimize their allocation globally.In recent years,with the establishment of Asia Investment Bank and the proposal of "one belt and one road"initiative,China's outward foreign direct investment has achieved unprecedented prosperity and has become the second largest foreign investor in the world after the US.In this case,based on the perspective of factor flow under open conditions,this study incorporates OFDI and resource mismatch into a unified analytical framework,and explores the relationship and mechanism between them.As an important way of transnational flow of production factors,OFDI not only helps to realize the transfer of domestic marginal industries and excess production capacity overseas,but also helps enterprises to learn advanced technology and management experience,so as to improve their resource allocation efficiency,and to influence domestic enterprises through industry chain correlation effect,intra-industry and inter-industry demonstration competition effect,which can promote the flow of resources to more efficient enterprises,and have an important impact on the allocation of resources in the home country.On the basis of theoretical analysis,this study estimates the capital mismatch index and labor mismatch index of 29 provinces and cities in China,constructs static and dynamic panel models,and empirically investigates the impact of OFDI on resource mismatch in China by using GMM method which can control endogenous problems.It is founded that there are a certain degree of capital and labor misallocation in every province of China during the period of investigation,and there is a significant difference in the degree of misallocation between regions.In addition,there is a certain path dependence of resource misallocation,which means that the past level of misallocation has an impact on the current resource misallocation.We also find that outward foreign direct investment can improve the misallocation of capital and labor resources in China significantly,thus improving the efficiency of resource allocation.This result is still robust in exchange for different resource mismatch index.Further studies have found that there are regional differences in the role of outward foreign direct investment in the allocation of resources mismatch.The difference between the level of overcapacity and the direction of misallocation will also affect the estimation results.Therefore,we should further accelerate the market-oriented reform of the factor market,giving full play to the decisive role of the market in the process of resource allocation,in order to optimize the allocation of resources.At the same time,under the background of China's steady promotion of the "one belt and one way" initiative,the relevant government departments should actively encourage enterprises to go abroad for overseas investment,so as to improve domestic resource mismatch and overcapacity,and promote the transformation and upgrading of the economic development mode.