Fdi Spillovers, Empirical Research: Enterprise Group's Perspective

Since reform and opening up, the huge market potential and the advantage of cheap labor in China has attracted large-scale foreign direct investment. FDI brings capital, management skills and technology to host countryies.More developing countries emphasis the spillover effects of FDI through which to get advanced technology and management science. China has kept implementing"exchanging market for technology"strategy for many years, the main target is to bring on the foreign advanced technology and improve the domestic technology and assure stably economy growth.In the 21st century, both domestic and international economic environment have changed a lot. Business groups developing in reform and opening-up period mostly attracted foreign direct investment. Have these FDI in business groups generated positive spillover effect to improve the technology and competitiveness of domestic enterprises in business groups? This paper research the spillover effect of FDI from perspective of business groups on the foundation of FDI theories and business group theories.On the foundation of reviewing relative literatures, chosing domestic industrial enterprises in business groups as research objects, this paper divided FDI into two parts: first part is FDI existing in the business groups; second part is FDI coming from out of the business groups and the same industry and area as the industrial enterprises in business groups. Productivity of labor and export of domestic enterprises are chosen as dependent variables, and"innovation ability"and"state-owned share"are moderator variables. The spillover effect of these two parts FDI are presented by multiple linear regression equation, using panel data of industrial enterprises of China from 2000 to 2006 and fixed-effect model. The main conclusions are as follows:1. Both the spillover effects of FDI in the business groups and FDI out of the business groups did not significantly or positively influence labor productivity and export of domestic enterprises in groups. However, the stronger the innovation ability of domestic enterprises is, the more possible the investments from Hong Kong, Macao and Taiwan produce spillover effect.2. The innovation ability and state-owned share have influences upon the spillover effects of FDI, and these influences vary with the sources of FDI.3. Direct investment coming from foreign country brings about different spillover effects from the investment from Hong Kong, Macao and Taiwan.4. The regression results partly support that FDI in business groups more possible generates spillover effects than FDI out of business groups.Based on the regression results, combined with the China's national conditions, the author carries out deep analysis on the spillover effect of FDI, and draws some limita- tions of this study. Some ideas on future research are brought forth as well.