Foreign Direct Investment, Spillover Effect And Endogenenous Economics Growth

Under the huge background of economic globalization, foreign direct investment (FDI) has been playing a more and more important role in the development of developing countries. The latest two decades years of the reform and opening up to the outside world, our country have made a tremendous achievement in the making use of FDI. However, unlike the circumstance of 1980's,at present, the central purpose of utilization of FDI is to utilize it's advanced technology to enhance the whole level of our industrial technology.In this paper we analyze the effect of FDI on the economic growth through spillover effect in an endogenous quality-enhanced economic growth framework, utilizing the panel data methods with the consideration of the economic data of 39 industries in Guangdong Province. The results suggest that although there is a positive but minor technology spillovers from FDI, the competitive effect and the human resource flow effect are both negative and quite significant, exceeding the positive technology spillover effect greatly. After further research on the enterprises with different ownership structure, we find that the reformed state-owned enterprises benefit most from the spillovers. In the end, we conclude that the improvement of local industries technology absorb ability, formation of human resource market and a fair and mature competition environment are the necessary condition for the local industries and enterprises to take advantage of the positive spillover effect while avoiding the negative competitive effect as well as human resource flow effect.