To examine the effect of Foreign Direct Investment on domestics firms' productivity, The thesis is constructed by two chapters: in the first chapter, the author examines whether firms' productivity is the determinant that attracts the foreign capital. The result shows that FDI's positive effects on TFP may simply reflect the endogeneity that the FDI invests in more productive firms. Firms with a mature export network. Based on the conclusion in the first chapter, the author estimates the pure FDI effects on firms' productivity with a multi- periods DID method. By comparing the originally domestically-invested, then Foreign- or Hong Kong, Macao, Taiwan- invested enterprises with consistently domestically-invested enterprises, the result shows that state- invested firms' productivity benefit more from FDI, particularly, the foreign investment. FDI positive effects for global integration and increases liquidity for private-invested firms.