Mechanism And Factors Of FDI Technology Spillover Effect

The technology spillover effect of FDI may be regarded as an important way for the developing host countries to get advanced technologies. It may be the most important way for developing countries to enhance self-innovation, to achieve upgrading of industries and to realize economic development. Since all countries in the world attach importance to acquire advanced technology through the effect of FDI technology spillover, the study of technology spillover effect of FDI is of great theoretical and practical significance.In this paper, the study of FDI technology spillover is based on the condition and environment of Guangdong Province, utilizing the panel data methods with the consideration of 31 typical industries and 21 cities from 2004 to 2007 in Guangdong Province. We not only analyze the short-term effect, but also consider the long-term effects of FDI technology spillover. By introducing virtual variables, we further analyze the short-term and long-term impacts of industrial characteristics (such as including technology gap, competition and industry gathering) and regional factors (R&D investment, human capital, infrastructure construction, the degree of opening economy) on FDI technology spillover.The results show that when we try to attracting FDI for realizing a sustainable development of Guangdong's industry economy, we should fully consider the characteristics and condition of the industry and manage the FDI flow.