A Study On The Spillover Effect Of The Equipment Manufacturing Sector Of Shenyang

Since 1990s, the rapid growth of foreign direct investment accelerated the economic globalization and promoted the rearrangement of the worldwide productive capital. From the eye of the host countries where the capital flows to, the most concerned focus is the external property of foreign direct investment, which is also known as the spillover effect. To most of the host countries, taking good advantage of the opportunity to cooperate with the foreign enterprises to make their local enterprises a rapid progress in the technological field is considered more practical comparing with the technology trade. Our country timely turned the strategy of the foreign capital utilizing to "trade the market with technology" which is also called "learning-by-doing". The extreme goal of this change is to speed up the economic growth by triggering the spillover effect actively.Shenyang, whose traditional advantage lies in the equipment manufacturing sector, is the heavy industry center of China, with the fast development of its economy recent years, Shenyang has obtained a great deal of foreign capital inflow. Therefore, how to use the spillover effect effectively through cooperating with some world-wide famous carriers in equipment manufacturing under the circumstances of re-prospering the old industrial base in North East China to promote the competition ability of the local works is the coverage of our research.We have collected and read a good number of relative documents, both domestic and foreign. The investigation and research among the government and the enterprises make the firsthand data fruitful. On the basis of the previous study, we summarized the characteristics of the equipment manufacturing sector of Shenyang by analyzing the current situation. In the following research, we collected data of the equipment manufacturing sector ranged from 1999-2003. According to the popular measures of the research in this area, we built a model based on an extended production function originally created by Cobb-Douglas and analyzed the spillover effect on Shenyang's equipment manufacturing with statistic measures. It turns out that the spillover effect does exist interactively with the rapid inflow of foreign direct investment thoughit is not quite obvious. Further more, we made detailed researches from three different mechanisms respectively. The result shows that the competition effect of the intra-industry and the training effect are not obvious, while the demonstration effects of the intra-industry are considered distinct. The spillover effect of the general equipments manufacturing sector and the special equipments manufacturing sector together with the electrical machines manufacturing sector are more obvious so that we can remain their central status in Shenyang's economy. This is also the direction of the investment related policies. The restraining factors of Shenyang's equipment manufacturing sector are analyzed sequently as well. In the end we tried to propose several practical suggestions for both the government and the enterprises superficially.