Study On Crowd-in Or Crowd-out Effect Of Foreign R&D Investment

With the integration of world economy, more and more foreign companies set R&D institutions in China, carrying through R&D investment. It is a disputed issue that such behavior activates the innovative capability of domestic companies, or makes domestic companies depending on foreign technology. Some scholars consider that foreign R&D investment fetches up the gap of our own R&D funds. And if the domestic companies don't want to be the inferior position, they have to increase the R&D investment, when competing with the foreign companies. Some else consider that the strong R&D capabilities of foreign companies will strengthen their competition dominance, even making it monopolization dominance. The domestic companies will be in survival rattrap under this pressure. So the entering of foreign R&D will weaken the R&D capabilities of domestic companies.This paper is named after"Study on Crowd-in or Crowd-out Effect of Foreign R&D Investment", aiming at whether the foreign R&D investment can promote the domestic relative investment.This paper is divided into six chapters as follows: chapter one introduces the background and the aim of the research, summarizing the emphases, innovation and the content of the paper; chapter two introduces the meaning of R&D investment and R&D internationalization, reviewing the present researches and the theoretical background of R&D investment crowd-out (in) effect; chapter three describes the present situation of foreign R&D investment in China, and makes a brief analysis for its farther posture; chapter four puts forward the theoretical frame of this paper based on the theoretical analysis and the impersonality, and studies the effects of foreign R&D investment by using the modern econometric analyzing methods, which confirms that there is crowd-in effect among the whole industries while crowd-out effect among some high investment intensity industries; chapter five summarizes the influence of foreign R&D investment, and gives some suggestions; chapter six summarizes the conclusions of the research.In this paper, the author researches how the foreign R&D investment affects the domestic correlation investment by the regression analysis of the panel data, which contain the investment data of 23 primary industries from 1997 to 2005. on the basis of the above research, this paper draws main conclusions as follows: 1) It can be seen that among the whole industries, the foreign R&D investment has promotion functions on domestic correlation investment. Because of the foreign R&D investment, the domestic companies invest more; 2) Through the regression analysis of 10 industries, whose foreign R&D investment is much bigger, it can be seen that the foreign R&D investment restrains the domestic correlation investment. As the domestic companies are at inferior position, their desire of investment is lower; 3) The effects of foreign R&D investment nearly correlate with the foreign R&D investment intensity. The higher the intensity is, the more crowd-out effect is. 4) To maximize the crowd-in effect, this paper makes some suggestions: Unify the policies of foreign R&D investment. Strengthen the protection of key industrial technology. Increase the intercommunion of foreign and domestic R&D institutions. Promote the convergence capability of high-tech persons. Encourage the domestic companies setting R&D institutions abroad.This paper summarizes theories about R&D investment crowd-out (in) effect through referring to many literatures, and analyzes the present situation of foreign R&D investment by using the contrast method of graph and table. In the empirical study, this paper expands and modifies the existing Agosin and Mayer (2000) model through including the penetration rate of investment, and testifies the crowd-out (in) effect of foreign R&D investment by using econometrical analysis such as panel data.