Empirical Analysis On The Technology Spillover Effect Of FDI

Ever since the late 1970s, China began to attract foreign direct investment, the cumulated actual use of foreign capital amounted to 685.429 billion u.s dollars at the end of 2006. From 2002, the use of foreign capital exceeded the USA and became the biggest country of attract investment. At the same time, the policy of revitalizing the old northeastern industrial base, a large of amount of FDI is invested into Liaoning, Liaoning province rank the forefront of the three northeastern provinces in attracting FDI and overall economic indicators leads in the three northeastern provinces. But dose the FDI of Liaoning produce technological spillover; Dose the FDI of Liaoning promotes the technology and the growth of economy; and the problem of how to promote the technology and the growth of economy through FDI.First of all, the study achievements that domestic and foreign scholars study on foreign direct investment has been summarized and give the inherent mechanisms of technology spillover effect of FDI in this paper based on existing achievement in this field. Then, the paper analyzed and summarized the development situation and characteristic of FDI of Liaoning. Because the R&D has impact on the growth of technology, so we take the influent factor into consideration according to actual situation. So that we established an expanding model based on the production function of cobb-Douglas, and then analyzed the technology spillover effect of FDI by using the related data of Liaoning from 1989 to 2006. After that we compared the technology spillover effect of FDI of Liaoning and 11 eastern provinces, and analyzed the reason of the differences of technology spillover effect of FDI between Liaoning and 11 eastern provinces. At last, the paper pointed out the advices of promoting the technology spillover effect of FDI in Liaoning, mainly promoting the absorptive capacity of Liaoning and nurturing fierce competition environment.