Technology Spillovers From Foreign Direct Investment: In The Chinese High-Tech Industry

Sinces 1990S,foreign direct investment (use FDI for the abbreviation in the following paragraphs ) attracted by china has been increased rapidly,and china has already become the world's largested country of FDI inflows.Recently,high-tech industry has attracted lots of FDI inflows.Under the environment of open economy all over the world,the source of technological progress includes both domestic and foreign resources for innovation.Foreign direct investment has become the most important international technology spillover channel.Some developing countries suggest "market for technology"strategy,which draw much attention of policy makers and scholars. So what are the main mechanism and factors of FDI spillover? How FDI affect the technological progress of domestic enterprises in the host country?This paper focuses on the Chinese high-tech industry.firstly, describes the status of use of FDI in high-tech industry and analyzes the theoretical basis of technology spillover.Then uses real economic panel data in industry level,establishes econometric model and carries empirical analysis to examine the overall inward FDI spillover effects in the Chinese high-tech industry .Also adopt the method of group regression to test the factors which will affect the degree of spillover.The findings show that FDI bring positive spillover in high-tech industry,promot technological progress of domestic enterprises.Furthermore,the absorptive capacity of domestic firms,the level of competition,the technology gap between domestic firms and foreign firms are the important factors which affect the degree of spillover.In the empirical analysis,we also test the spillover of R&D activity carried out by the transnational Corporations in china,the result reveals it has positive influence on the ability of independent innovation of domestic enterprises.Finally,based on the empirical analysis,this paper concludes some advice.such as how to make use of FDI spillover to improve the technological progress of domestic enterprises and to promote the development of high-tech industry.