Technological Innovation, FDI and China's Manufacturing Export Competitiveness: An Empirical Analysis based on China's 26 Industries Panel Data

In this paper, we firstly construct export competitiveness index to measure China's manufacturing export competitiveness with the method of Balassa, Secondly, we propose two theoretical hypothesis how technological innovation and Foreign Direct Investment (FDI) influence export competitiveness, thirdly, we construct econometric model to empirically analyze the effects of technological innovation and FDI on the manufacturing exports competitiveness in the use of panel data of China's 26 manufacturing industries from 2001 to 2007. The results show that both technical innovation and FDI have positive affects on the export competitiveness of China's manufacturing industry, while changes in export competitiveness of China's manufacturing industry have strong path dependence.