Research On The Impact Of FDI On The Upgrading Of Industrial Structure In The Three Southwest Provinces Of China

Foreign direct investment(FDI),as an important force in China’s economic development,has become a major driving force for promoting China’s economic growth in recent years.Especially in the western region,with the continuous implementation of China’s western development policy and the gradual increase of national preferential policies for the western region,more and more foreign investment has entered the three southwestern provinces.The three southwestern provinces utilize their advanced technology and management experience advantages to promote local economic development.In 2021,there were a total of 23699 foreign-invested enterprises in the three southwestern provinces,an increase of 17.4% compared to2020.The actual amount of foreign investment used was 12.67 billion US dollars,9.32 times that of 1997.Although there has been significant development in foreign direct investment in the three southwestern provinces,there is still a significant gap compared to the eastern coastal cities,and there are significant differences in the level of business operation,economic development,and industrial structure among the provinces.Does FDI in the three southwestern provinces have an impact on industrial structure,and is its impact positive or negative? Does the level of business environment play a role in the process of FDI affecting industrial structure upgrading?Is there a provincial difference in this impact? Studying these issues has important theoretical and practical significance for the three southwestern provinces to effectively utilize FDI to promote industrial structure optimization from the perspective of business environment.This article uses qualitative analysis,quantitative research,and comparative research methods to study the specific impact of foreign direct investment on the industrial structure of the three southwestern provinces and each province.Firstly,this article defines foreign direct investment,industrial structure upgrading,and business environment,and elaborates on their basic theories and research status;Secondly,this article analyzes the overall FDI and industrial structure development status of the three southwestern provinces,and measures the level of business environment and industrial structure.The results indicate that: firstly,foreign direct investment mainly flows to Sichuan Province,with FDI in Guizhou Province and Yunnan Province much lower than that in Sichuan Province,indicating a significant difference in FDI flows;Secondly,the development speed of the three industries in the three southwestern provinces is not the same;Thirdly,there is a preliminary relationship between foreign direct investment and industrial structure upgrading in the three southwestern provinces.Furthermore,based on theoretical analysis,this article finds that foreign direct investment has an impact on industrial structure through capital supply effects,technological effects,industrial correlation effects,competition effects,and demonstration effects.In view of this,this paper empirically analyzes the impact of FDI on the upgrading of industrial structure by using panel data of 30 cities subordinate to three provinces in southwest China from 2006 to 2020.The empirical results indicate that: firstly,FDI can promote the rationalization and upgrading of the industrial structure in the three southwestern provinces;Secondly,taking the business environment as a moderating variable,it was found that the business environment can promote the inflow of foreign direct investment and also promote the impact of FDI on the upgrading of industrial structure in the three southwestern provinces;Thirdly,there is a threshold for business environment in the impact of FDI on the upgrading of industrial structure in the three southwestern provinces.The higher the level of business environment,the greater the driving effect of FDI on the upgrading of industrial structure in the three southwestern provinces;Finally,based on the analysis results,this article proposes targeted policy recommendations on how to use FDI to promote industrial structure upgrading in the three southwestern provinces from the perspective of business environment.