Foreign Trade Policy Spillover Effects Of Foreign Direct Investment In Technology Research

This paper tries to, in the frame of new growth theory, from the new point of trade policy, discuss the inherent mechanism between trade policy and technology spillover of domestic country.Considering the inflow of FDI is a prerequisite of the spillover of FDI, so how domestic trade policy affect the inflow of FDI was discussed firstly. In the following stage, the affect mechanism of trade policy on the spillover of FDI was established from theoretical level. we arguing that different trade policy can led to different purpose of FDI, then affect the direct of FDI, led to multinational's different market status, and affect the channel of spillover, consequently, affect the spillover effect of FDI.Based on theoretical analysis, we tested the inferrer of the effect of trade policy on spillover of FDI empirically. We follow endogenetic economy growth theory, utilizing the model of economy growth of two departments, and section data of fractionized branches of Chinese industry in the year 1996,to test the above inferrer, trade policy was proxied by national rate of tariff and effective rate of tariff. To make empirical result more believable, we introduced gross production function model, utilizing the panel data of Chinese regions from the year 1993 to 2003, sorting 29 regions into comparatively free trade policy regions and comparatively protected trade policy regions according to the ration of the total amount of imports and exports of foreign companies to the amount of FDI of every regions, and comparing the spillover effect between these two regions of different nature. Again, we demonstrate the former theoretical inferrer empirically.Based on the former theoretical analysis and empirical test, we argue that domestic trade policy can significantly affect technology spillover of FDI. So finally, we used the panel data of Chinese regions from the year 1993 to 2003 and introduced gross production function model with trade policy variable, studying the effect of Chinese trade policy on spillover of FDI. According to the conclusion of empirical study, we gave suggestions about trade policy.