| Attracting foreign capital has always been a very important issue in China’s economic development.Along with the continuous deepening of reform and opening up,and the increase of China’s influence on the international economic stage,a large amount of foreign capital has gradually entered the Chinese market.As a major FDI investment country,the impact of foreign capital’s entry on China’s economy is increasingly important,especially the impact on residents’ income,and domestic debates on the spillover effect and crowding-out effect of foreign capital are increasing.In addition,the Chinese market environment has undergone tremendous changes in the new period.The entry of foreign-invested enterprises has not only enhanced the degree of market competition,but also faced challenges in adjusting and optimizing the industrial organization structure.After entering,some foreign-funded enterprises extended their monopoly position in the home country to the host country by virtue of technological advantages and management advantages,and formed a pattern of foreign-funded industry development in the host country market.It can be seen that the entry of foreign capital shows the characteristics of competition and anti-competitiveness to the development of local enterprises.To what extent does the competitiveness of FDI promote economic development and increase the income of residents in the host country,and the degree of anti-competitiveness of FDI has caused a degree of monopoly and welfare losses The study of these issues is particularly important for the optimization of government policies in the new market environment.This thesis first sorts out the literature on the effects of foreign investment and market competition,and explains the theoretical basis of this study,and analyzes the mechanism by which market competition affects FDI to improve the income level of residents.Second,this thesis uses a qualitative analysis method for foreign investment entry,the market The relationship between the competition and the income level of the host country’s residents is described.Finally,the empirical analysis method is used to verify the mediating role of market competition in the impact of foreign capital’s entry on the income relationship of the host country’s residents and put forward targeted opinions.For the empirical analysis,this thesis selects industry-level data from 2003 to2017.First,the panel fixed-effect model is used to test the income level of residents in FDI and market competition.The study found that FDI has a significant inverse U-shaped curve effect on Chinese residents’ income,and that market competition has a clear mediating effect on host country income changes caused by FDI.Among the improvement effects of foreign capital entry on national residents’ income,the mediating effect of market competition accounted for 9.88%.The anti-competitive nature of FDI has caused a loss of 0.047 percent of the income of residents in the corresponding industry,of which the mediating effect of market competition accounted for 31.47%.Secondly,this paper conducts a subdivision study of the total sample data and finds that FDI has the largest income improvement effect on the secondary industry in China,followed by the improvement effect of the tertiary industry,and the primary industry is not yet obvious.Specifically,if other conditions remain unchanged,every 1% increase in FDI in the secondary industry will increase the income level of the country’s residents by 46.91%;every 1% increase in FDI in the tertiary industry will increase the income of residents by 37.65%.Moreover,after the financial crisis in 2008,the market competition effect of foreign capital was smaller than that before the crisis.Therefore,when supervising foreign investment in China,China must also consider the changes in the external market environment and pay attention to the coordination of industrial policies,foreign investment policies and antitrust policies in order to maximize the income improvement effect of foreign investment. |
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