Technology Spillover Effects Of FDI In China

Foreign direct investment (FDI) is an important channel for most developing countries to utilize advanced technology to realize long-run growth, because packaged technology can be transferred through FDI. From 1980s, China has made policies to attract FDI, and now the amount of FDI utilized by China is the most among developing countries. From 1990s, the technology spillover effects have been a hot issue in China. Technology spillovers were really there? What impacted the effects? What can the government do to facilitate the effects? The answers of these questions are important for a country to make correct policies for FDI.The thesis begins with general theories of technology spillovers in host countries of FDI. Direct investment, transnational technology transfer, and spillover effects were defined firstly. Then the process of transnational technology transfer was analyzed, followed by analysis of spillover mechanism of FDI in host countries. In the last part of chapter 2, a simple model was established to make a statistical research on the technology spillover effects of FDI in China.In the following two chapters, a statistical research was made using provincial data and sectional data. The data sets used were panel data set of 31 provinces of China, and panel data set of 27 two-bit manufacturing sectors respectively. In addition to the whole economy research, the thesis analyzed the impact of several factors on technology spillover effects of FDI in China in comparison method. The results are as follows. If the foreign capital stock increased 1 percent, the product of local sector will grow 0.136 percent. The technology spillover effects of FDI in China are mainly inter-industry and the intra-industry spillover effects are not remarkable. Opening degree is still an important factor for enforcing the spillover effects of FDI in China. Enhancing technology absorb capacity is necessary and effective for the country to enforce spillover effects of FDI, which provides the theoretical support for the design of correct policies for FDI.