Study On The Technology Spillover Mechanism And Effects Of Foreign Direct Investment In China

Developing countries get advanced technology through the introduction of foreign direct investment to promote endogenous growth of their economies. The introduction of foreign direct investment in China was originally designed to boost economic development, foreign exchange and capital shortages, but now in the face of huge foreign exchange reserves and high savings rate, are there really technology spillovers of foreign direct investment in China as expected? How is the spillover effect affected by specific factors? This paper uses a combination of theoretical and empirical research means. First from the perspective of industrial economics, it proposes the economic concept of technology spillover effect of foreign direct investment, and then focuses on the mechanism of the spillover effect.In the theoretical framework it builds up a two-sector model, adding foreign direct investment spillovers delay factor productivity equation and different factors of production. Combining China's automobile industry time-series from 1990 to 2009, the results show that foreign capital sector in China's automobile industry plays a more active role than the national sector in production efficiency. There is technology spillover but not strong delay effect. This result is consistent with our foreign technical overflow condition. In conclusion, introducing foreign direct investment should focus on the domestic market environment, policy support, independent R&D and innovation so as to better include the technology, management experience in the host country overflow.