The Technical Spillover Effects Of Foreign Direct Investment

It's generally accepted that FDI has great influences on a country. Compared with the research made in the past which was mainly in the respects of funds and management, the paper makes a research on technical spillover effects of FDI in China with the method of econometric models on the basis of making a summary of the research contributions of the scholars of all the countries in this field.The transmitting channels and constraint factors are described and analyzed. Because of the economic unbalance between the East China and the West China, a model is designed to test the technical influences on the comparatively developed regions and underdeveloped areas in China respectively. What's more, the paper tries to find out the relationship between the FDI and domestic investment, the effects of the foreign capital absorbed by a province on the technical promotion in the industries of other provinces. The data of Zhejiang province are also used to make analysis.Such conclusions are make as follows: FDI has strong positive effects on technical improvement in East China while weak influences in West China, it will enhance the domestic investment rather than crowd out it. Besides, the wider the technical gap between the foreign and domestic enterprises is, the greater return there will be; the spillover effects are substantial in the industries where a firm has closed relationship with the other companies and vice versa. Some suggestions on the policies are given at last.