The Impact of FDI on Technological Efficiency of Natural Monopoly Industry in China

Abstract

Objective As one of the countries that have joined WTO, China has made a promise to the world in the WTO that it will gradually relax the rules and regulations of telecommunications and other industries within a certain period of time in the future, and allow foreign businessmen to enter these fields. This decision has led to a large number of FDI entering some domestic natural monopoly industries. This paper aims to study the impact of the introduction of these FDI on the technical efficiency of natural monopoly industries. Method In this paper, we select the A-share listed companies in transportation, warehousing, postal and power, thermal, gas and water production and supply industries, information transmission, information technology services, culture, sports and entertainment industries in 2008-2017 as the test samples for empirical analysis. Result The data analysis shows that for information transmission, information technology service industry and culture, sports and entertainment industry, the injection of foreign direct investment makes the technical efficiency of the corresponding industry companies appear negative reaction. For transportation, warehousing, postal industry and power, thermal, gas and water production and supply industries, the injection of foreign direct investment (FDI) makes the technica efficiency of corresponding industry companies appear positive promotion, but for transportation, warehousing and postal industry, positive promotion is not obvious. Conclusion It is concluded that FDI has technology spillover effects on China's monopoly industries. There are different technology spillover effects, and the spillover effects of different monopoly industries are different. Based on this, some policy suggestions for introducing FDI into different types of natural monopoly industries are put forward.