Mass Effect Decomposition and Index Measurement of Two-way Direct Investment Growth in China

PANG Lei1 and ZHU Tong2 （1.School of Economics and Management，Yunnan Normal University，Kunming 650000，Yunnan，China；2.School of Economics，Nankai University，Tianjin 300071，China）

Abstract：Based on the database of UNCTA from 1979 to 2020 and the historical data from statistics communique ，and the provincial panel data of China's two-way direct investment from 1979 to 2020，the authors adopt the IDP model and threshold method to formulate the two- way direct investment index (TDI)，which is the result of the interactive development of China’s foreign direct investment (FDI) and outward foreign direct investment (OFDI) ，and carry out the quality effect decomposition and index measurement of two- way direct investment growth in China. It is found that ：China's two- way direct investment is positively affected by such factors as trade openness，economic structure，economic development level，technological level and area border，and restrained by environmental regulation；at the same time，there exists the threshold effect in China’s two-way direct investment，which is from the "covenant-lite" to the "high threshold"，and from "high speed" to "high quality" growth；and there are regional differences in the growth effect of two- way direct investment ，namely the growth is steady in the central region，while the growth in the southwest and northwest regions show similar trends with that in the east and northeast regions. In addition，comparing the growth effect before and after the Belt and Road Initiative (BRI) ，we can find that the BRI effectively promotes the development process of two-way direct investment in China.

Key words：economic growth；quality of two-way direct investment ；technological innovation；the threshold effect