Impact Of Foreign Technology Transfer On Technology Innovation In China

As far as a developing country concerned, international technology transfer is the cheapest way to access technological progress. The advance technology transferred by MNEs can not only increase the manufacture ability of developing country, but also promote the technology innovation ability, and the late function is the key for developing country to realize industrialization and sustainable economic growth. Since reforming and opening-up for 30years, China has two important channels to introduce foreign technology: one is purchase technology, the other is introduce technology by FDI. Through the two channels, the manufacture ability of our country is increased rapidly, but whether or not promotes the technology innovation ability is still doubtable, and need be researched in this dissertation. This paper anlyses the impact of FDI and technology trade on innovation of Chinese enterprises in the same model, so as to provide the foundations of policy making.Firstly, this paper establishes a dynamic game model within the framework of cumulative innovation to explore the impact of foreign technology transfer on indigenous R&D. The main conclusions are: MNEs tend to select FDI pattern in order to inhibit the host country's innovation ability; MNEs choose technology Licensing (include other styles of technology trade) only if the licensing fee is large enough. The game model also demonstrates that both FDI and Licensing has two effects: positive and negative.Secondly, the dissertation conducts an empirical study on how MNEs' modes of technology transfer impact. Using the industrial panel data on China's both large- and medium-sized enterprises during 1999-2004 to conduct system GMM estimation, this paper examines these effects. Our results show that technology purchased have both the direct substitute effect to reduce the R&D investment, and the indirect technology spillover effect to promote the indigenous R&D investment; the competition effect of FDI has significant promoting and prohibiting influence in the short term, but not in the long term; the spillover effect of FDI is not significant in either long term or short term.Thirdly, in order to get a solid policy recommendation, this paper select classical industries to conduct case study. Automobile industry of China has not accessed improvement of innovation ability by introducing FDI. On contrary, electrical equipment industry has stepped over technology gap for 30 years by technology purchase.This dissertation concludes that technologies we purchased are indeed advanced and our innovation ability has improved through technology imports, and FDI has no significant influences on our innovation activity. Based on this conclusion, this paper makes some policy recommendations: continue to introduce foreign technology; to introduce foreign core technology by trade as much as possible, otherwise we can raise the technology threshold of FDI; government should support innovation activity in some focus industry.The innovations of the dissertation are as follows: anlyses the impact of FDI and technology trade on innovation of Chinese enterprises in the same model; establish the game model which distinguishing the core techonology and ordinary technology; the dependent variable is not TFP but R&D investment, and this paper deduce the impact of foreign technology transfer on innovation ability of Chinese enterprises Combining the theoretical and empirical study together.