Impact of Industrial Hollowing on a Country's Economic Development

Industrial hollowing has more disadvantages than advantages to a country's economic development. Starting from the generally accepted viewpoint, the authors distingush the developed countries represented by the United States and Japan from the developing countries represented by China, and take the transnation direct investment, i. e. the incentive of industrial hollowing, as the cutting point, demonstrate respectively from the four aspects of trade balance, unemployment rate, competitiveness of manufacturing and technological progress the different influence of industrial hollowing on the economic development of developed and developing countries. For the developed countries, industrial hollowing can promote their structural adjustment; but for the developing countries, it will make them lag behind more and more, which is the real hollowing.