Technological Diffusion Via FDI And Economic Growth Of China

Since reforming and opening-up, particularly after 1990's, the foreign direct investment flowing into China has increased rapidly. Large mount of foreign direct investment flowing into China has promoted actively the accumulation of capital, the elevation of the investment and resource allocation efficiency and the exploitation and utilize of human capital. Foreign direct investment has become one of powerful underlies for sustained and fast economic growth of China. However, introducing foreign direct investment does not means mastering the advanced technology, successfully mastering the advanced technology embodied in the foreign direct investment have a process of assimilation, absorbability and creation. How is the extent of technological diffusion via foreign direct investment effecting on the economic growth of China? And it is the subject and objective this dissertation want to study. Firstly, the backgrounds, objectives and problems of this dissertation are expatiated, the concept of technology and technological diffusion are defined, the difference between technological diffusion and technological transfer and technological spillovers, and the dynamic and static paths of technological diffusion and its classify are introduced, the distinction between technological diffusion via foreign direct investment and others channels is indicated definitely. Then, technological diffusion theories, mechanismes, evidences, and methodologies are reviewed in the literature summarize, the theories of technological change and technological diffusion developed in recent years including models with an expanding variety of products, models with improvements in the quality of products and the leader-follower model are introduced and commented. Following up, an analytic framework for multinational company, talent mobility and technological diffusion is given to formalize the mechanisms how talent mobility effects the technological diffusion and the conditions how technological diffusion occurred. We find that once the multinational company invests in host country, in order to prevent technology lost as talent dismissal, it will pay higher wage for the local employees. Therefore, the welfare of host country will be improved, though the technological diffusion via multinational company to local enterprises does not occurred.Four empirical analyses for China on the technological diffusion via foreign direct investment across regions and industries are provided. Firstly, using predecessor's analytic framework, the degree of technological diffusion via foreign direct investment across regions in China is tested, the difference of technological diffusion between the eastern, middle and western regions are compared. As the foreign direct investment flowing into China has been changed greatly after 1992, the variation of technological diffusion degree before and after 1992 are compared in temporal level. We find that in both periods, either in the country level or in each region level, the technological diffusion from foreign direct investment across China does not exist significantly. Secondly, the variation on determinants of FDI location distribution across China is analyzed. We find that there is much difference of determinants of FDI location distribution between regions across China, and these determinants have been changed timely. Before 1991, most of inflow FDI in Guandong and Fujian provinces are from Hong Kong and Taiwan respectively. The main factors are geography and culture. Most of FDI are export-process orientation. In the others coastal areas, the main determinants of attracting FDI are local labor quality and local market size. The higher the labor quality and the market size are, the more FDI flow into. In the same period, the determinants of FDI location selection in the remote middle-western provinces are the market size and the labor quality. In the middle-western areas, even though the labor cost is relative high, the high the labor quality is, the more FDI flow into. After 1992, the determinants o...