The Influence Of The Construction Of Shanghai Free Trade Zone On Foreign Direct Investment

In the process of continuous development of economic globalization,Foreign Direct Investment(FDI)is the main part of the country.The configuration of the inter-capital element plays an important role in the economic development of our country,and the free-trade area strategy is one of the national strategies implemented in our country,which is to improve the opening-to-open level and the level in the severe state of the global economic development.In order to meet the economic development “ new normal ” and the important strategic deployment and experiment of the “One Belt and One Road”strategic decision-making,in the background of building a new open-type economic development model.In this paper,China(Shanghai)Free Trade Experimental Zone was established on September 24,2013 as the main research subject,and the effect of Shanghai Free Trade Zone on foreign direct investment in the region is analyzed and studied.First of all,this paper discusses the “negative list” management mode carried out in the Free Trade area,the 30 Financial regulations issued by the people’s Bank of China,and the financial innovation policies such as the liberalization of capital items in the Free Trade area.At the same time combed and summarized the foreign direct investment location choice theory related achievements.However,as the first attempt of China’s free trade zone strategy,Shanghai Free Trade Zone has its financial and administrative system.It is urgent to analyze and evaluate the effect of degree innovation on Foreign Direct Investment in the region by more scientific and prudent quantitative research methods.This paper takes the Shanghai Free Trade Zone as a“ Quasi-Natural Experiment ” as a kind of policy,and uses the method of t Regression Discontinuity Design(RDD)to estimate the effect of the construction of Shanghai Free Trade area on the policy treatment effect of Shanghai Free Trade area on regional foreign direct investment(ATE).This method can better control and deal with the influence of“Endogenous”caused by“individual effect”of Shanghai itself on the estimation results,so as to obtain accurate and unbiased effect of policy processing.According to the results of parameter estimation and non-parametric estimation of nuclear density function,theestablishment of Shanghai Free Trade area has a significant promoting effect on Foreign Direct Investment in the region,and the LATE is about 51%.In other words,compared with the previous period,Shanghai’s quarterly Foreign Direct Investment growth of about 51%.At the same time,we have carried on the covariant continuity test,the falsification test and the sensitivity test for different bandwidth,different kernel density function,and so on.From the result of the test,we can see from the test results.No substantial changes have taken place in the estimation of the effect of foreign direct investment in the Shanghai Free Trade area on regional Foreign Direct Investment,which further explains Shanghai.The policy effect of free trade area on foreign direct investment is not an accidental phenomenon,but an inevitable result of its internal operating mechanism.Finally,some reasonable policy suggestions and suggestions for the future operation and development of Shanghai Free Trade area(FTZ)are put forward according to the results of RDD estimation.