Research On The Factors Influencing The Technological Absorptive Ability Of FDI Of China

How to use foreign capital better, and how to absorb the vanguard technology which the foreign capital brings fully, have been influencing the development of the economy. The topic how to improve the FDI Technological Absorptive Capability (FTAC) of China is significant in the two aspects: theory and reality.This article first reviews the relative researches, summarizes the theoretical foundation and empirical researches of technological spillovers, and find two reasons for the differences of technological spillovers in different countries. One is because of the differences in research methods and data selection; the other is because of the differences among the host country's absorptive capacities. Thus, this thesis starts a study of FTAC, and separately summarizes the researches of FTAC from human capital, R & D, financial markets, market mechanism, and other aspects.This thesis mainly researches on the relationships between FTAC and determinants. At first, it probes into the basic theory and analysis method, secondly choose the proxies of FTAC, finally put these proxies into the regression model to test the relationships between FTAC and determinants and gain some valuable conclusions.The research shows, the gradually enhance of the gradually enhance of human capital is very important for China to improve FTAC. The improvement of FTAC depends upon the accumulation, good structure and efficient flowing of human capital. It is very important for China to increase investment of education, enhance structure of human capital, and attract student abroad back to carve out. Also important factor is R&D. Its structure and strength influent the FTAC and self-innovation of China. The empirical results reveal that the increase of investment in R&D make Chinese FTAC enhanced distinctly. Meanwhile, China should enhance the increase of level of output in R&D. Financial market enhances FTAC by giving the innovation and imitation financial support. So the author advises China should deepen financial reform, loosen financial restrict, open financial service market, reduce government interference. Especially financial market should give greatly financial support on the firm's technology imitations, technology absorptive and innovations. The forth important factor is the market mechanism: opening and competition. Moderate opening and orderly competition are the two aspects of good market environment for FTAC enhancement. Economy opening should keep to the principle of Moderate opening, balance the opening growth effect between short-term output and long-term, and confirm an appropriate opening level. In order to improve Chinese FTAC, It is also very important for China to build an orderly competition environment. Finally infrastructure is very important for China to improve FTAC. In order to enhance Chinese FTAC, China should think much of building modernized infrastructure.