Empirical Research On The FDI Technology Spillovers Of Chinese Automobile Industry

As national encomy pillar industry-automobile industry, its own rapid development has attracted more and more FDI. For a long time Chinese automobile industry has chosen a path called "market for capital, market for technology" by cooperating with transnational corporations. It can not be denied that foreign capital has played a significant role in promoting the automobile manufacturing capacity and improve the industrial structure. However, because of the large gap existing in R&D investment and development level compared with developed countries, local car makers are in the risk of "marginalization", one side is"market marginalized", the other side is "technology marginalized". The open mode of "market for technology" does not reach the desired objective, which has caused people's worry. To answer this problem, we must do a comprehensive study to re-examine the pros and cons of FDI, and then we can have a clear and correct understanding. In this situation we can bring forward corresponding countermeasures to improve the integrative level of the automobile industry by making good use of the technology spillover effects of FDI, and develop the endogenous technology ability of the national automobile industry.The paper mainly uses a combination of qualitative and empirical research methods. First of all, the article analyses the mechanism as well as factors of technical spillover effects from FDI. Secondly, taking the automobile industry as the main study object, the paper analyses FDI development in Chinese automobile industry, including the course, the characteristics as well as the trend and so on, then analyses the positive effects and the negative effects of foreign direct investments in automobile industry from the perspective of the whole industry. In the empirical part, this paper studies Chinese automobile industry FDI technology spillovers from two perspectives: first use the productivity-based model to study FDI technology spillovers to domestic firms,then use the impulse response functions and variance decomposition study the effect of FDI to total factor productivity of domestic firms, which further validate earlier conclusions. Then it comes to the basic conclusion: on the one hand, the FDI of automobile industry has promoted the technology progress and industrial upgrading overrally; on the other hand, the "competitive spillover effects" of FDI to domestic firms is positive, but the"agglomerative spillover effects" is negative, which was replaced by "crowding-out effect". Finally, according to the research result, propose the corresponding policy suggestions on how to better promote and expand the FDI spillover effects and establish a genuine national automobile industry.