Upgrading domestic industries is one of the main objectives of the″g oing-out for development strategy″launched by the Chinese government and a new topic in the related research field as well . Through a careful checking on the existing related researches and typical cases , this paper tries to build a mechanism model about ODI effects on industries of the home country , clarify the logical links between ODI activities and home country's industrial changes , and suggest a simple empirical model for empirical work . In view of the late starting and limited size of the ODI made by the Chinese enterprises , the empirical work can be done with typical regions and typical industrial sectors . The empirical checking in the way of panel data analysis shows that ODI has some positive effects on industrial upgrading , and there is also a positive correlation between the scale of ODI and industrial upgrading .