Study On The Influence Channel Of FDI On Labor Productivity Of Service Industry In China

Since 2012,the service industry has simultaneously become the three industries that account for the largest share of GDP and create the most jobs.In this context,as the proportion of the service industry continues to increase,the labor productivity of the service industry and its speed of improvement have a significant impact on the growth of urban and rural residents' income.However,overall,in recent years,the labor productivity of China's service industry is significantly lower than that of the secondary industry,and the gap between the labor productivity of service industry and that of developed countries is even larger.This situation will not only restrict the improvement of labor productivity of the whole society,but also restrict the growth of urban and rural residents' income and the improvement of the international competitiveness of China's service industry.Therefore,it is urgent to improve the productivity of service industry.At present,China's service industry has entered the stage of comprehensive opening up.In the process of developing the service industry,China is implementing the policy of overall promotion and gradual opening up.FDI in China's service industry is increasing year by year.In 2010,FDI in the service sector surpassed that in the manufacturing sector for the first time and became the industry that attracted the most FDI in China.Based on the summary of the existing theories and studies,this paper concludes that the FDI inflow of China's service industry will bring a profound impact on China's economy and is conducive to improving the labor productivity of China's service industry.Through theoretical analysis,this article summarizes the mechanism of action of services FDI on China's service industry labor productivity is:foreign direct investment to bring the advanced technology and management experience,increase the host country market competition,increase the host country service industry output,by raising the level of technology in service industry,the average salary,improving knowledge structure of service sector employment,increase the added value of service industry,influence in the service sector labor productivity.In this paper,panel data of 14 sectors of China's service industry from 2006 to 2016 were selected,and the influence mechanism of FDI on labor productivity in the service industry was analyzed in detail by using the mediating Effect Model.This paper took the technological level,average wage,employment knowledge structure and added value of the service industry as intermediary variables to test the intermediary effect of FDI on labor productivity of the service industry.The results show that technological progress,added value of the service industry,and FDI of the service industry can wholly affect labor productivity of the service industry.The mediating effect of technological progress is the biggest and belongs to the complete mediating effect.It shows that FDI in service industry can improve labor productivity of service industry in China by promoting technological progress of service industry.And wage effect and employment structure effect,due to the characteristics of China's domestic environment is not obvious:pay rise just as producer services FDI effects on the labor productivity of producer services intermediary variables,and not as a productive service industry on the influence of the labor productivity of producer services intermediary variable.The reason is that the quality of labor force required by non-producer services is relatively low.Such labor force is relatively abundant in China and cannot compete in the labor market.Therefore,the increase of wages cannot mediate the impact of FDI inflow on labor productivity of non-producer services.As an intermediary variable,employment knowledge structure can only play an intermediary role in the mechanism of effect of FDI on labor productivity of non-producer services,and the intermediary effect is relatively small.Employment knowledge structure cannot be used as an intermediary variable in the process of producer services FDI affecting labor productivity.The reason is that the labor cost of China is constantly increasing at present.In order to reduce labor cost,enterprises use capital to replace labor force,which will lead to the decrease of the proportion of skilled labor force in relevant enterprises.Based on these,this paper puts forward five suggestions:first,targeted to increase the opening of the service industry;second,to improve the level of human capital;third,establish a complete domestic investment environment;fourth,fully energize the labor market;fifth,actively promote the development of the country's service industry.