The Impact Of China 's Financial Development On The Overrun Effect Of OFDI Reverse Technology

China’s economy has experienced a period from take-off to rapid development since the reform and opening-up policy was taken. Many companies have growth from a small business to large enterprises, even as the industry leader. In the contest of economy rising, economic globalization and the state "going out" strategy, these domestic developed companies will look into the world and take the pace of foreign direct investment. With the annual foreign direct investment growth, foreign direct investment in the reverse technology spillover effect has been concern by the academics. Scholars study the reverse technology spillover effects from various ways as well as the factors. However, most scholars are just staying in the study of the mother country’s human capital, technology gaps, institutional differences and other factors, but put little attention to the impact of financial development level of the home country. However, the impact of the finance of absorbing the foreign direct investment spillover effect is huge. It can Imagined that without the support of capital nothing can make progress. It is the same to absorbing the technology spillover effect. The companies’ ability of taking the support of finance and the low interest money is depended on the level of financial development. The level of financial development also makes the difference of the companies’ ability of absorbing the technology spillover effect. This study refers to complement and make some useful suggestions which can promote our country’s economic development, but also hope to provide some valuable reference for later researchers. With the study of previous studies and the myself, we establish two indicators to behalf the level of the financial development, then we use Chinese provincial panel data between 2003--2013 to make regression analysis. Through the single variable regression analysis we find that our R & D capital stock, the stock of foreign direct investments and the level of development of financial have a positive impact to the TFP. But the role of R & D capital stock is more important than the other two factors. The cross-variable regression analysis shows that the level of financial development of a country has a positive impact to absorb foreign direct investment reverse technology spillover effect. Linear regression models fit the existing data more better which means that even the impact of the current level of technology is weak, but it will grow more and more powerful as the level of financial development increasing.