The Empirical Research of the IFDI's Influence upon the Comparative Advantage of Export Products from China

The comparative advantage index of export products from China according to the technology intensity classification shows that low technology products are still the main source of China's comparative advantage, but their level is going through a decreasing process. The level of the comparative advantage of high technology products is on an increasing trend. Using the data during 1992-2012, this paper's empirical test shows that IFDI has played a positive role in China's comparative advantage transition from low technology products to high technology products by promoting technical progress, shifting the endowment structure of production factors. So China should continue to attract actively foreign direct investment, especially to guide the multinational companies to invest in high technology industries and promote IFDI's spillover and industry correlation effect.