The Impact Of FDI In Producer Services On The Manufacturing Productivity Of China

The report of the 19 th National Congress of the Communist Party of China pointed out that China’s economy has shifted from a stage of highspeed growth to that of high-quality development.How to achieve sound and rapid economic development is an important issue of common concern for academic research and policy formulation in China at this stage.As the main body of the substantial economy,the manufacturing industry’s development level affects the overall situation of economic development and determines a country’s comprehensive strength fundamentally.After the reform and opening up,China has complied with the requirements of the development of productive forces and made full use of its own factor endowment advantages,so that the scale of manufacturing has expand rapidly and actively integrated into the global production network system.However,China’s manufacturing technology level is still in a low-end position in the global value chain at present,and under the background of intensified trade friction between China and the United States,China’s manufacturing industry is facing a dual extrusion.On the one hand,the developed countries shift manufacturing focus back to domestic,on the other hand,the developing countries participate in global division of labor system actively.The original factor-driven development mode of China’s economic growth has been unsustainable.Therefore,we should transfer our focus to the industrial upgrading strategy based on R & D,innovation and service so that we can make the manufacturing industry bigger and stronger.FDI(Foreign Direct Investment,FDI)in producer services industry is a major driving force to improve the productivity of manufacturing.Based on the existing literature and related theories,this article analyzes the mechanism of FDI in producer services on manufacturing productivity,and then combines relevant data to discusses the openness of producer services and the development status of manufacturing deeply.In the empirical part,we use DEA-Malmquist to measure the total factor productivity(TFP)of 22 provinces in China from 2006 to 2017,then established econometric model and obtained the empirical conclusions by Differ GMM to examine the impact of FDI in producer services on manufacturing productivity,and subdivide the producer services to further analyze the impact of different industries.The results shown that: FDI in producer services does have a positive impact on improving productivity of manufacturing,but this impact is relatively weak.The productivity is promoted by technological efficiency which is the producer services’ main mechanism of action.From the specific industries,the FDI in leasing and business service,information transmission,computer services and software and scientific research,technical services and geological prospecting has a significant positive impact on the improvement of manufacturing productivity.Finally,based on the empirical results and realistic factors,we put forward suggestions to promote the productivity of manufacturing from the perspective of introducing foreign investment and industrial integration.