A Research On FDI Technology Spillover Effects

1. The research purpose of the thesisSince China began to carry out the policy of opening to the outside world and introduction of foreign capital, the total FDI has reached 660 billions and China has been one of the countries which attracted the largest amount of FDI all over the world.The inflow of large amounts of foreign capital brought in capital, advanced techniques and management experience. It made up the gap of capital and techniques in the development of our nation's economy, promoted the economy, increased the employment opportunities, the income of workers and government's tax.But the inflow of foreign capital also brought in some negative effects. Except for the problem of high dependence on foreign capital, increasing of financial risk, forming of industry monopolization and the destroy of environment, in fact, our nation's weak status when attracting foreign capital usually made us have to accept the low price. Under pure processing trade pattern, our nation can just solve the employment problem with low returns, which is not propitious to upgrading domestic industrial structure.So whether"the market for technology"policy can heighten industrial technology level will become the most important factor when establishing foreign capital introduction policies.Although some academicians think domestic industrial technologies can be improved by the way that cooperating with foreign investors, introducing advanced technologies and then diffusing to other domestic enterprises to form technology spillover effect, there are also controversies among researchers both here and abroad on this problem. And the domestic literatures usually concentrate on one or a few of special topics and don't form systemic contents.Besides, most research articles just discuss the technology spillover inside the industries, just few researchers pay attention to the technology spillover outside the industries. In fact, foreign-capital enterprises may be more aspiring in cultivating and supporting the cooperative relationship between suppliers and manufacturers. So compared to inside technology spillover effect, the outside technology spillover effect may be more important.This paper brings outside technology spillover into the model, evaluates its significance and tries to promote the research on FDI technology spillover. Based on the empirical results, this paper also gives some policy suggestion.2. Main contents and structure arrangementExcept the exordia, this paper contains four chapters.Chapter 1—the literature review of FDI technology spilloverThis chapter summarizes the definition of FDI technology spillover and analyzes its characteristics.The academic research on technology spillover began in 1960s', and at that time the most scholars concentrated on the mechanism of technology spillover and constraints.And in the empirical fields, on the aspect of whether there are technology spillover effects and the affects of constraint, different scholars had different standpoints and formed controversies.In recent years, some foreign researchers began to pay attention to the outside technology spillover effects, and supported the point that outside technology spillover effects were more important than inside spillover effects. Their research method also provided valuable reference for the future research.Chapter 2—the analysis on FDI technology spillover mechanism.This chapter analyzes the channel of FDI technology spillover: affiliation effects, imitating and competing, transfer of personnel. In addition to this, mechanism of constraints is contained in this chapter too. This chapter also takes OEM, production of supported products, strategic alliance and strategic technical cooperation as examples to analyze the details of inside technology spillover effects.Chapter 3—the empirical research on FDI technology spillover effects. Based on the former models of inside technology spillover, this chapter introduces new variables to test the outside technology spillover effects. It uses 24 industrial's data in 5 years to estimate the model.Chapter 4—Research result and policy suggestionAccording to the above analysis, this chapter draws the following conclusion:FDI has significantly positive relationship with technical level of domestically-funded enterprises;FDI has significant inside spillover effects and forward spillover effects, but the backward spillover effects are not significant;Compared to inside spillover effects, the forward spillover effects are more significant.Based on the results, this paper gives the following suggestions.Government should continue to attract foreign capital in order to improve the technical level of domestically-funded enterprises;Government should reinforce the industries'association and promote the forward and backward spillover effects of FDI;Government should facilitate the localization of foreign economy and improve the import dependency.3. Main innovationThe main innovation of this paper is to expand the research model in chapter 3.This paper introduces new variables into Feder's model(1982) to present the outside forward and backward effects. In the process of establishing model, the principle and data in input-output table has been used in order to reflect the influence of inside domestic asset amount, labor in domestic enterprises, inside foreign asset amount, forward foreign asset amount and backward foreign asset amount on technology level of domestically-funded enterprises.The last point is due to the limitation of model, this paper doesn't test the influences of constraint factors on technology spillover, such as market competition, absorbing ability of host countries, education level, economy level and intellectual property protection, which are worth further research.