Analysis On The Effect Of FDI On Independent Innovation Capability Of Zhejiang Province

The core competitiveness of enterprises and regions mainly depends on the capability of Independent innovation. As the arrival of the third round economic restructuring and implementation of overall innovation strategy, more and more attention focus on how to enhance the independent innovation capability of domestic enterprises.Zhejiang province has made use FDI since the early eighties of the 20th century, and it has entered the forefront list of China in terms of scale and incremental. So, studying whether FDI can promote enterprises of Zhejiang province improving independent innovation capability and how to achieve it is an issue with strategic importance.Although much research has made about the technology spillovers of FDI, researchers don't obtain consistent conclusion. In addition, early researcher mainly studied the effect from the angle of intra-industry rather then inter-industry and backward linkages. As a result, researches on the technology spillovers of FDI from backward linkage and the effect on independent innovation capability of Zhejiang province still need to be supplemented.On the basis of relational theories, this paper use theoretical inference method to analyze the feasibility of use FDI of backward linkages to enhance independent innovation capability of domestic companies and the mechanism between them, then using the data from Zhejiang to test the mechanism and its factors like technical characteristics, market characteristics, the technology gap. At last, according to the conclusion put forward suggestions for government and enterprises of Zhejiang.The theoretical analysis finds the mechanism between FDI of backward linkages and the independent innovation capability of domestic companies, and enriches the results about them. At the same time, conclusions form the research of Zhejiang province will give advice to government and corresponding companies to expend the positive influence from FDI to them.Research procedure: first, analyzed the feasibility of using FDI to enhance the independent innovation capability form three angle, they are the inevitability of FDI, the possibility of FDI technology spillovers effect, and the influence of FDI technology spillovers to domestic companies; second, explored the overflow mechanism of FDI from analyzing the main part, the overflow condition, the overflow ways, the driving force and FDI spillover model. And then put forward five hypothesis ;Third, carried out the empirical tests by data of Zhejiang province, this part conclude three point, they are choosing corresponding indicators, describing the situation of FDI and R&D of Zhejiang province, testing the effect of FDI spillover in Zhejiang.Conclusion: 1.In theory, it's possible for domestic companies to enhance independent innovation capability by using FDI spillover effect ; 2. verifying the mechanism of how FDI of backward linkage influence domestic company's independent innovation capability, and obtaining FDI technology spillover model; 3. FDI of backward linkage in Zhejiang significantly promoted domestic companies upgrade their independent innovation capability; 4. Factors like the level of competition and technological opportunities of one industry accelerate FDI spillover effect, but factors like technology gap and technology intensity don't work like them.5. Government can promotes FDI spillover effect by building communication platform, improving regional innovation system, optimizing the industrial structure and so on; 6. Domestic companies of Zhejiang province can also promote FDI spillover effect by changing the concept of how to innovate, increase the input of R&D, enhancing the relationship with FDI.Innovation of this paper: 1. verifying the mechanism of how FDI of backward linkage influence domestic company's independent innovation capability, and obtaining FDI technology spillover model; 2. Through empirical test proved that FDI of backward linkage promoting companies upgrade their independent innovation capability, further more , Factors like the level of competition and technological opportunities of one industry accelerate FDI spillover effect, but factors like technology gap and technology intensity of one industry don't work like them.