The Effectiveness Of Knowledge Spillover Of FDI In The Region Of China

Since the 1980s' the reform and opening up. with the rapid development of economic, China has attracted a large number of Foreign Direct Investment(FDI). Now, China is building an innovation-oriented country, which is to enhance the capability of independent innovation, in particular, to develop their own intellectual property rights of key technologies and core technology. Patent is an important form of the outcome of Technological innovation and is a basic measure of technological innovation and scientific and technological level. Well, does FDI which flows into China has brought the growth of patent applications as well as the capital it has brought, does China has absorbed transnational corporations' advanced technology to enhance its own scientific and technological strength? So the effectiveness of Knowledge Spillover of FDI in the region of China is the concern of this paper.In this paper, the panel data of 30 provinces and autonomous regions from 1992 to 2005 are used. Domestic patent application which is the dependent variable of the degree of effectiveness of Knowledge spillover, and FDI, science and technology activities persons, science and technology activities funds, the per capita GDP which are the independent variables, are put into the regression equation, being calculated by SAS. Then the conclusions of effectiveness of Knowledge Spillover of FDI in the whole nation and east, middle, west region of China are drawn:(l) From the national level, Foreign Direct Investment in the early 1990s, with a large scale into China, made up for the lack of domestic funds, but only brought about a low level of effectiveness of Knowledge Spillover; To the late 1990s along with restructure of FDI, the effectiveness of Knowledge Spillover was largely improved. But to the early 21st century, with the sudden expansion of FDI, the phenomenon of emphasizing rather on quality than quantity became serious in China, the effectiveness of Knowledge spillover of FDI fell down again. (2) From east, middle, west region of China level, effectiveness of Knowledge Spillover of FDI in the east is the most obvious, followed by the middle, and the effectiveness in west is the weakest, especially in the beginning of the 21st century in west only had a weak negative effectiveness. (3) Of these three kinds of patent, the effectiveness on design patent is most significant and the effectiveness on invent patent is most minimum. Furthermore, we analyze the reasons for this phenomenon in order to provide relevant references which are available in promoting the effectiveness of Knowledge spillover of FDI.