The MNC's Strategic Alliances Spillover Effects On Self-Innovation In China

With the rapid development of technology change and economic globalization, Multi-National Corporations have been establishing strategic alliances to gain and strengthen advantage in international competitions. As a new form of strategic organization, strategic alliances not only make the Multi-National Corporations' technology accessible for the domestic firms through spillovers of innovation, which reduces the technology gap with the technology frontier, but also reduces R&D cost and risks by resources sharing effects, and consequently accelerate the process of innovation, and improves domestic enterprises' innovation ability, which is crucial for catching up with advanced countries.This paper analyses the mechanism between transnational corporations' strategic alliance, technology innovation as well as the factors that play important roles in the process of innovation spillover of transnational corporations' strategic alliance. In addition, by using the time series data of China, this paper further make an empirical investigation on the spillover effects of transnational corporations' strategic alliance, with an emphasis on the role of financial market efficiency, intellectual property protection and human resources.The empirical results show that, firstly, multinational corporations' strategic alliance plays an important role in China's technology improvement and technology innovation; secondly, the effect of financial market efficiency in the process of technology spillovers is ambiguous which hinges on the forms of innovation; thirdly, high level of human resources improve the output elasticity of innovation; fourthly, low level of intellectual property rights reduces the output elasticity of innovation and even block the innovation spillover of transnational corporations' strategic alliance. Thus this paper make suggestions on making full uses of spillover effect of transnational corporations' strategic alliance, improve the ability of self innovation and China's technology development.