Intellectual Property Rights Protection In Hostcountry And Technology Spillovers From FDI

In global economy, the technology progress of one country benefits from both self-innovation and international technology spillovers. Confined by their weak innovation ability, international technology spillover has been the main source of technology progress in developing countries. As one of the most important formats of external economic activity, FDI and its technology spillover effects have got many attentions. In order to prompt economic development and technology progress, most developing countries give favorable concession to FDI. However, technology spillover from FDI is confined by the investment environments in host country, in which intellectual property rights protection is one of the most important compositions.Due to its public good's characteristic, knowledge is both non-exclusive and non-competitive. To keep their technology advantage, home countries avoid the transfer of advance technology to host countries in which intellectual property rights protection is weak. So, the level of intellectual property rights protection affects both the quantity and the quality of FDI, and then has effects on the spillover of FDI. In addition, the level of intellectual property rights of one country has effects on its innovation ability, technology import and foreign patent applications, which have influence on the absorptive ability of FDI technology spillovers. Under the pressure of Trips, and in order to attract more high quality FDI, developing countries, including China, make efforts to strengthen their intellectual property rights protection. But stronger protection will impede the diffusion of technology. So, the effects of intellectual property rights on the FDI technology spillover are obscure:weak protection is adverse to the inflow high quality FDI, and too strong protection will hinder technology diffusion.On the base of literature review and mechanism analysis, this article estimates the effects of intellectual property rights on the technology spillovers of FDI inflow to China from both the country and industry level. The empirical results indicate that the strengthening of intellectual property rights in China has a positive relation with the amount of FDI inflow to China, but it hasn't positively prompt the technology spillover; and it have no significant effect on Chinese technology progress through the promotion of domestic R&D inputs. According to these results, some suggestions are given in the last part.