Empirical Study On The Independent Innovation Impact Of FDI To China’s Private Enterprises

Since the1990s, the rapid development of private enterprises has become an important force(strength) in China’s national economic development, and even become a major economic development strength in some areas. However, in the context of a new round of globalization, private enterprises are facing with more intense(fierce) challenges, dependent innovation becomes the bottleneck factor of (restricting private enterprise to be internationalization) private enterprise internationalization. At the same time, more and more foreign direct investment in high-end manufacturing sector and R&D institution enter the Chinese market, which puts some impact on Chinese private enterprise. In the12th Five-Year Program for China’s Economic and Social Development(2011-2015), independent innovation once again play an important role in promoting China’s economic development pattern and adjustment of industrial structure. The Independent innovation was raised to certain strategic height, which creates a good opportunity for the development of private enterprises. In this case, it’s particularly important to analyze the impact of FDI on the independent innovation of private enterprises. At present, the research on the subject is less, and the conclusion is not too clear. There is not well understood on the study of the effect path and the transmission mechanism between FDI and private enterprises the capability of independent innovation. Therefore, investigation the impact of FDI on the capability of independent innovation of private enterprises has a necessary significance on the policy about introducing foreign funds.At first, this paper analyzes the necessity and practical significance on the study of independent innovation of private enterprises under the current background, and defines the concept of private enterprise, FDI, independent innovation. At the same time, the paper reviews research literature about the impact of FDI on host country enterprises at home and abroad, and then finds out the innovation and weaknesses of this paper.Secondly, the paper explains FDI and the present situation about innovation of private enterprise, and comparative analysis on the basis of the gap between FDI and private enterprises. Then the dissertation discusses how FDI affects the independent innovation of private enterprises. Finally, the paper discusses the impact by establishing econometric model. In the established equation, patent is dependent variable, it stands for innovation of private enterprise. Science and technology personnel input and capital input of private enterprise and FDI are independent variables. To verify the relationship between patent and FDI, firstly, we have patent and FDI Granger causality test. When obtained the result about the causal relationship between patent and FDI, the paper does regression analysis of the equation, and the result shows that the relationship between patent and FDI was not significant, but they change in the same direction. The relationship between Patent and technology personnel input and capital input are significant. Therefore, in order to improve the innovation capability, private enterprises should increase technology personnel input and capital input.Thirdly, on the basis of qualitative analysis and quantitative analysis in the first few chapters, the dissertation combines with Chinese economic development situation and the status of development of private enterprise, and it forwards some policies and suggestions separately from the aspects of government and enterprises, which suggest how to improve the private enterprises’ independent innovation ability.