Study On The Technological Spillover Effects Of FDI On Electronic Industry In China

With the impetus of globalization, the economic contact between countries is becoming closer and mutual dependence is strengthening. The change of a country's technology often comes not from its R&D, but is the results of knowledge diffusion and technology transfer. Since FDI accelerates the diffusion of knowledge around the world, it has become an important channel of the international technology diffusion. And inward FDI not only increases the capital stock, but also raises the technological level of the host country through spillover effects.The business model of electronic industry is changing from vertical division of labor to vertical integration and horizontal division of labor. China is becoming the manufacturing base of global electronic industry. So the FDI enterprises have become the main force to promote the industry's development. However, the technical level is not increased rapidly. At present, the advanced products and key components are still dependent on imports. The manufacture system of large-scale integrated circuits that rooted in China has not yet formed. Therefore, the empirical study on spillover effects is of great practical significance.Firstly, this article reviewed related theories and the study status quo at home and abroad, and then we analyzed the channels and mechanisms of FDI spillover and pointed out that the investment motive of MNC and the absorptive capacities of host country have great impact on spillover effects. Secondly, this article elaborated on the global production network and the status quo and trends of the utilization of foreign investment in China's electronic industry, as well as the technical level. Thirdly, we used panel data model to test the existence of FDI spillover effects and its influencing factors. The results show that: The FDI spillover effects on China's electronic industry are not significant as a whole. And what's more, the spillover effects on smaller enterprises are significantly negative. The shortage of absorption capacity is one of the key reasons. Finally, this article gave the policy recommendations.