Research Into FDI Intra-industry Spillover Effect

While empirical researches into the FDI Spillover Effect get more popular and profound, there are still disputes on some important aspects such as the influence factors and basic approach of it. Taking Wuxi as study object, the essay would provide with some representative regional evidences to the issue. It begins with a brief introduction of related literatures from both domestic and abroad, and then carries out a series of linear regressions to examine whether there is the theoretical FDI Intra-industry Spillover Effect. Empirically, some case groups of the more than 200 enterprises questionnaired with certain characteristics come to support the spillover effect's existence. The characteristics include higher productivity, advanced production facilities, reasonable export rate, and more R&D input, which are proved to be highly related to the effect, i.e. key influence factors. Further study shows that there is somewhat positive interaction between the labor productivity of foreign-invested companies and domestic ones, and competition with moderate intensity contributes more effectively. Moreover, the essay goes on with a case study of two different technology development routes. It concludes from the evidence of Chinese diesel pump and nozzle industry, that technology gap and R&D input are significant for the occurrence of FDI Intra-industry Spillover Effect; meanwhile, competition intensity, shareholding structure and administrative instructions would also impose obvious influences. Based on the analysis above, finally the essay puts forwards with some policy recommendations of how to exploit the spillover effect and improve the technology development of domestic enterprises in nowadays open economy.