The Effect Of Foreign Investment Motivation On Fdi Technology Spillovers

In the empirical literature on analysing technology spillovers from foreign direct investment (FDI), FDI are usually treated as homogeneous capital .However, as a kind of foreign capital, FDI has unique attributes which will affect the spillovers of FDI. This paper analyses the heterogeneities of FDI from the view of motivations of investors, and believe that the heterogeneities of FDI lead to the heterogeneities of spillovers. Firstly, this article divides the motivations into two types, one of them is seeking for markets and the other one is seeking for resources. Correspondingly, FDI is divided into two types:market-seeking FDI and resources-seeking FDI. The main purpose of this paper is to analyse the spillover effects from FDI, considering its investment motivation.Firstly, this paper tries to find the respective performances of different FDI in channels which lead to spillovers,such as competition,demonstration,backward and forward linkages,labor mobility and so on.This paper also analyses the causes which leads to the different spillovers theoretically. Empirical research deals mainly with the spillovers from the two kinds of FDI.Using a large panel of Chinese industries, this paper find suggestive evidence that an increase in market-oriented FDI will raise the productivity of domestic firms.The same condition occures when we are using the panel of technology-intensive industries and the panel of labor-intensive industries. The effect of the industry in technology-intensive outperformed that of labor-intensive industries.When resources-seeking FDI can raise the productivity of technology-intensive industry , it reduces the productivity level of labor-intensive industries. Therefore, this paper concluds that China should introduce market-seeking FDI,and guide FDI flows into the technology-intensive industries.