Research On Transfer Mechanism About Technology Spillover & Dispersion Of Chinese Firms' FDI To Independent Innovation

Economic globalization has forced China to highly develop its foreign direct investment. At the government's suggestion to "Go abroad " , many of Chinese enterprises go abroad to search for advanced technology to elevate enterprises' technology standards. Since 2003, the amount of China foreign direct investment has been increased by a big margin.According to foreign direct investment theory, foreign direct investment is the transfer of an intermediate good, called knowledge, which embodies a firm's advantage, whether it be the knowledge underlying technology, production, marketing or other activities. In prior research of Multinationals' different motives for expanding abroad ,we find two motives are very prominent: one is that firms with unique capabilities expand abroad themselves to obtain higher returns. Another is that firms expand abroad in search of capabilities that are not available in their home markets instead of utilizing capabilities already on hand. This motive has been termed "technology seeking" or "knowledge seeking ". Knowledge seeking FDI not only occurs among technical laggards trying to reduce their gap by investing abroad to acquire needed knowledge but firms from leading technical centers who want to increase their knowledge diversity. They would like to invest in other leading technical countries directly. As the externalities of knowledge are localized, they do not spill perfectly over spatial borders. In order to remedy distant disadvantage, firms from other countries choose to invest in knowledge -intensive regions to obtain higher rates of innovation and productivity by technology transfer or spillover.The transfer of technology implies the transfer to the recipient of not only the technical knowledge needed to produce products, but also of the capacity to master, develop, and later produce autonomously the technology underlying these products, processes, and know-how. Technology has its own way to transfer: formal technology transfer arrangements and informal channels. In these ways, firms investing abroad can obtain new technology and realize technology transfer. Some researches on contrary technology transfer show firms can get contrary technology transfer effect by making foreign direct investment. We analyze and conclude that China firms have obtained new technology, promoted technology and enhanced independent innovation capability by investing in developed countries, the four mechanisms such as "R&D Expenses-sharing Mechanism", "Research and Development Achievements Feedback Mechanism", "Contrary Technology Transfer Mechanism" and "Outer R&D Stripping Mechanism".This paper has pointed out the theme of technology transfer by analyzing the motives of foreign direct investment. By analyzing the characteristics of technology, we get the mechanism of technology transfer. On the basis of that, we comb out the technology innovation mechanism of the firms which make foreign direct investment. Finally, we smooth out the mechanism of China firms investment in developed countries (technical leading countries and areas) which has promoted China technology.