Research On The Impact Of Human Capital Level On China’s Foreign Direct Investment

Because of the reform and open up in the late 1970s,based on China’s huge consumer market,stable investment environment and other advantages,China has attracted a large number of fdi and become the second largest destination for fdi.Foreign direct investment not only promotes the improvement of China’s production efficiency,but also improves China’s technical level through technology spillover effect and promotes China’s rapid economic development.In consequence of the large population,China’s large labor force population has become the advantage of introducing foreign direct investment.However,with the slowdown of China’s population growth,the gradual disappearance of the population advantage,and the needs of the transformation and upgrading of China’s industrial structure,improving the quality of the population has become an important way to promote the high-quality development.Therefore,China has continuously increased its investment in education funds,the average number of years of education of the population has increased steadily.The level of human capital has been gradually raised.Under the circumstances to explore the influence of human capital level on fdi is important for China to optimize the structure of introducing foreign capital and accelerate industrial transformation and upgrading.At the beginning of the paper,the background and significance of this paper are introduced by chart and data,all kinds of research methods used in theoretical and empirical research are pointed out,searches and summarizes the theoretical basis and relevant literature research of human capital and foreign direct investment,summarizes and draws lessons from previous studies,and considers the impact of the change of human capital level on foreign direct investment.Secondly,the paper describes the realistic characteristics of human capital level and fdi,combs the influence mechanism of human capital level on foreign direct investment.This paper intercepts the provincial panel data of China from 2003 to 2018 for research.This paper apply the fixed effect model,and uses the marketization level,trade dependence,infrastructure level,agglomeration level,economic development level and industrial structure as the control variables of the model to study the impact of the level of educational human capital on foreign direct investment from the national and regional levels.After the robustness test by changing the explained variables,explanatory variables and tail shrinking regression,the results show that:the level of human capital play a significant positive role in promoting foreign direct investment.The level of human capital increased 1%will make the fdi increase 0.69%.From a regional perspective,the correlation between human capital and fdi in the eastern and central regions is significant.There is a negative but not significant relationship between human capital level and foreign direct investment in the western region.At last,on the basis of analysis above,some targeted suggestions are given.First,we must devote much more attention in improving the level of human capital and continuously improve the structure of human capital in China.Second,we should improve the human capital sharing mechanism to guide the flow of talents and coordinate the regional allocation of human capital.Third,we should build a human capital-oriented investment policy to gradually form the gradient layout of human capital in China.We must pay much more attention on the level and structure of human capital,so as to make China’s introduction of foreign capital develop in a diversified direction and serve the needs of China’s high-quality economic development.