Research On The Effect Of Technology Transfer On Technology Innovation In China Based On FDI

Technology transfer refers to the dynamic process in which technology is digested, assimilated, and utilized in new environment after transferred from the technology supplier to recipient through variable approaches for realizing the specific objective of actor. Our country, as the biggest developing country in the aspect of attracting foreign investment, how to utilize FDI, the important manner of international technology transfers, to promote the development of self-renovation has become our significant theory and practical problem. So far, although available literature about analysis and quantitative regulation of the relativity between FD and technology innovation obtained some achievements, the entire and systemic research on technology transfer mechanism and internal mechanism of technology influence on is still absent, and don't pay enough attentions to the research on the combination of FDI technology transfer and the technology innovation of host country.As the two actors involved in technology transfer, technology gaps between developed countries which own advanced technology and developing countries which is short of technology resources will not only results in the technology transfer between them, but also the succession of technology transfer, and consequently improve the whole technology level of host countries. However, the technology gaps between two actors should be within a reasonable extent, otherwise efficiency of technology transfer will be restricted. From the aspects of both motivations, FDI has become the significant management methods of multinational corporations for the objective of global and maximizing profit; meanwhile, the characteristics of FDI make it to be an effective manner for host country to obtain technology. Capital, technique and proprietary technology in manipulation and knowledge and skill needed for the advance of technology constitute the different levels of transferring technology, and the effect on the progress of host country's technology increases with the improvement of levels; however, the change of technology levels in some degree is the change of competitive strategy of multinational corporations which results from that competition has become very tough. There are several approaches for multinational corporations to transfer technology through FDI, which include Greenfield investment, international merger and acquisition, personnel flow, demonstration and competition and industry association, and different approaches have different influences on performance of technology transfer. Furthermore, performance of technology transfer lies on its environment, and uppermost on innovation environment, competition environment human capital environment and environment of host country.FDI technology transfer results in the technique overflow consequentially. Human capital flow, competition and industry association are the primary approaches of FDI technique overflow. Firstly, from the view of the process of technique overflow, the efficiency of technique overflow resulting from human capital flow is closely related to the degree of quality optimization of human capital in multinational corporations and the flow of human capital between corporations. The degree of quality optimization of human capital in multinational corporations depends on the degree of personnel localization in multinational corporations, which is directly affected with management stage and the study and development strategy in multinational corporations; human capital flow results from the decisions of individual which is affected by the and based on the comparing the cost and profits, and salary, welfare, training and space for personal development are the main motivation. Secondly, the entrance of multinational corporations influences on the ability of technology innovation of host country through impelling the change of their market framework. On one hand, the strategy following results from oligopolistic reaction theory will bring about conducting efficiency, moreover the variable entrance manners of multinational corporations should directly influence on the change of market centralization of host country. On the other hand, multinational corporations easily make breakthroughs in entrance barrier of host country and reconstruction of entrance barrier through arranging the competitive strategy and competition by virtue of their possession of scale economy and specific capital. With the change of market framework of host country, the technology demonstration, the technology competition and the technology lock-in effect brought about by multinational corporations directly accelerates or restrains the industrial technology development level of host country and the advance of innovation ability. Thirdly, the industrial association results from the change of supply chain relationship and driving of self-benefit of multinational corporations and corporations in host country also results in strong technology overflow in host country. The relative positions of multinational corporations and corporations in host country in industry chain play the key role for industry development in host country. As the primary crunode of global industry chain, multinational corporations occupy the leading position in industry chain related with host country, and promote the industrial technology development of host country by virtue of supplying affiliated corporation with fund and technology assistance. For several developing countries on the top of industry chain, the entrance of FDI provides the possibility of for relevant industry; however, for the most ones at the bottom of industry chain, the entrance of FDI will worsen the crisis of contemporary industry insulation, include the host country to get into the trap of bumper poverty, restrain the upgrade of industry structure, effect on the of embedded characteristic.The advance of innovation ability of host country isn't the necessary result of the technology overflow in the process of technology transfer, and the technology absorbency of host country is the primary factor of this advance. Absorbency actually is the corporation's ability of internalizing, assimilating conforming and exploiting the transferred technology, which is close related with the human capitals and the corporation's ability of study and development. Human capital is the foundation which promotes the knowledge conversion in corporation and the internal motivation of knowledge creation, and plays the role of doorkeeper in the process of absorbing technology and also the role of introducer of new knowledge, meanwhile plays an important part in communicating beyond the mark. Moreover, knowledge stock of personnel and the variety and interaction of knowledge between individuals have the important influences on absorbency. The entrance of FDI improves the quality of human capital of host country, restrains the flow of human capital towards outside, accelerates the flow of human capital towards inside, and consequently increases the price of human capital. Therefore, the entrance of FDI creates the good opportunity for the improvement of human capital in host country, but also brings the corporation in host country the technology innovation pressures. The ability of study and development is another important factor for absorbency, which is effected by FDI indirectly. The multinational corporation influences on the corporation scale, corporation benefit more or less in the production process of host country, thereby acts on the activity and the improvement of study and development, moreover activates alternate intension between existent knowledge and knowledge which influence on corporation inside and outside by improving the knowledge stock of corporation.FDI technology transfer is a complex problem which involves many factors, which effects on technology innovation of host country in different degrees from several angles and levels. The empirical analysis of the influence of FDI on innovation ability of domestic-invested corporations from 1999 to 2004 by the Panel data model shows that FDI improves the innovation ability of our domestic- invested corporation on the whole, but the improvement isn't significant .In order to reduced the effect of divergent degree of foreign investment attracted among industry on the result, this dissertation furthermore makes empirical analysis of five industries which has the higher degree of FDI entrance, which shows that FDI dramatically improves the innovation ability of our domestic invested corporation. According to the analyzed results, this dissertation concludes that our country should adjust and optimize the strategy of attracting investment, support of domestic invested corporation, the environments of attracting investment and utilizing investment, in order to play the important role of FDI to our industry technology innovation ability.