Foreign Direct Investment,Upgrading Of An Industrial Structure

In this paper,the panel cointegration method was used to measure the capacity utilization rate of the industrial sectors in 30 provinces and cities in China during 1990-2016.Based on the fixed effect model,the effects of industrial structure and foreign direct investment on productivity utilization are tested in this paper,and at the same time,R&D input,fixed capital stock,per capita education years,and urbanization rate are selected as control variables.On this basis,this paper carried out a sample test on the three regions of East,Central and West and three time intervals of 1990-2002,2003-2008 and 2009-2016.The study found that the capacity utilization rate is consistent with the fluctuation of the economic cycle.And The relationship between foreign direct investment and capacity utilization is negative.This is mainly due to the fact that when China introduced FDI,it ignored the control of quality and simply paid attention to quantity,which led to a mismatch between FDI and China’s industrial structure.Simultaneously,due to the relative backwardness of technology in the central and western regions,inactive investment activities,relatively underdeveloped market economy and other factors,industrial restructuring obviously has a positive effect on resolving excess capacity.After that,based on empirical test results,this paper gives the corresponding policy recommendations,such as transforming government functions,encouraging technological innovation,and establishing a combination of government regulation and market self-adjustment..Secondly,control the inflow of FDI quantitatively and strictly control the quality.While in the central and western regions,efforts should be made to phase out backward production facilities whose production facilities and production processes are lower than the industry average,and to merge and reorganize low-end production capacities.Finally,this paper summarizes the deficiencies in the data selection,industry division and other aspects,for example,the division of the region is more general,and there is no further research on the decomposition of overcapacity in specific industrial sectors.At the same time,different statistical methods have not been used for more accurate regression tests in view of different factors of excess capacity.These deficiencies have all given direction to the further study of the paper.