A Study On FDI Technological Spillover Effect

mechanism of FDI to promote economic growth as to promote the capitalaccumulation in host country. In the1980s, the endogenous economic growth theorywas formed. The view that knowledge and technology are the sources of a long-termeconomic growth has prompted many scholars began to study the role of FDItechnological spillover effect to enhance knowledge and skills in host country.Based on the perspective of endogenous economic growth, the paper combed thetheories about FDI technological spillover firstly, and then discussed channels andconstraints. At last it analyzed the current situation of FDI in China, and did anempirical test of the relationship between the FDI technology spillover effect andChina’s economic growth.The channels of FDI technological spillover mainly focus on four: thedemonstration effect, the competitive effect, the correlation effects and the talent floweffect. The meaning of the demonstration effect is imitate and "learning by doing", theeffects of competition is forcing enterprises to get technological progress,the effect ofcorrelation effects and the flow of talent is mainly by associations and contactsbetween multinational corporations and host country to achieve technologicalspillovers.Although in theory, the majority of scholars support the existence of a positiveFDI technological spillover effect on the host country, but a large number of empiricalstudies show that FDI technological spillover effect on the host country is uncertain,and the reason is that it is also affected by different factors. FDI technologicalspillover is an external effect, not only to benefit the overflow to source, or evenusually bring damage. For this reason, the overflow source usually through somemeans, such as government policies, the way of the investment, to restricts technological spillover; and recipients try to strengthen the overflow. The papermainly discussed five factors how to affect FDI technological spillovers, Including themarket system, the efficiency of financial markets, attract investment policies, marketsegmentation and protection of intellectual property.In30years of reform and opening up, China’s economy have developed rapidly.FDI technological spillover contributed significant to the promotion of total factorproductivity. In30years, FDI inflows have been growing rapidly, but overall, itsdistribution in the country, including industry, region, have shown unevencharacteristics, and do harm to the adjustment of China’s industrial structure andregional economic development.The empirical results show some conclusions worth considering. According totheory, facts and empirical results, the paper put forward some policy implications.