On Inter-industry Technology Spillovers Effect Of FDI In Jiangsu Province

Recently, Scholars at home and abroad increasingly concerning about theinfluence and significance of endogenous technological progress on long-termeconomic growth. Besides, debate among from all walks of life of our society hasbecome increasingly fierce in recent years. It is very necessary to evaluate the FDI ’sinfluence on economic development in China comprehensive and scientifically.This paper select Jiangsu province which represents China’s absorption of FDI asa study object, conduct objective FDI evaluation about inter-industry spilloverseffects on host country from the weak aspects of FDI inter-industry spillovers effectsstudy by those at home and abroad. This paper want to contribute theoretical andrealistic significance to the study of endogenous technological progress in openeconomic system, to scientific interpretation for export-oriented economy in JiangsuProvince, to logical guide for increasingly broad foreign investment attractingpractices.In order to explore the FDI inter-industry technology spillovers effect in JiangsuProvince, this paper undertakes comprehensive theoretical analysis and empiricalresearch based on reviewing relevant literatures. In the theoretical analysis, acomprehensive and detailed analysis on both the motivation of foreign and domesticenterprises to establish inter-industry association and the mechanism of inter-industryFDI technology spillover is conducted. For the empirical research, brief introductionto basic situation and characteristics of FDI in Jiangsu Province is made. Then in theprinciple of difference, overall existence-based test on inter-industry FDI technologyspillover effect and the corresponding test based on various value chains, differenttechnology features, and different ownerships of enterprises are undertaken by meansof panel data from totally27manufacturing industries in Jiangsu Province during pasteight years, referring to previous econometric model, and of indicators tables ofinput-output structure and forward and backward linkage indicators for the calculationof inter-industry FDI technology spillover effect in Jiangsu Province. And theninfluences upon the inter-industry FDI technology spillover effect by fives indicators,that is, technology gap, industry innovation level, market competition, exportintensity as well as dependence on foreign capital are measured.The above research shows that the FDI in Jiangsu province as a whole boasts significant backward linkage in technology spillover effect, but with less forwardlinkage. Differences of inter-industry FDI technology spillover effect exist inindustries with different value chain and or various technical characteristics. For thebuyer-driven value chain industry, forward-linkage technology spillovers effect isproved to be more significant than that of backward linkage, while for theproducer-driven value chain, forward-linkage technology spillovers effect shows to benegative and backward linkage of technical spillovers effect turns to be positive. Andhigh-intermediate-tech backward linkages of FDI technology spillover effect ispositive, while high-intermediate-tech forward linkages of FDI technology spillovereffect seems not to be obvious. Meanwhile, a high-low-tech forward linkage of FDItechnology spillover effect is obviously negative and low-tech forward linkages ofFDI technology spillovers is significantly positive.Forward linkages of FDI technology spillovers effect on the state-owned andprivate enterprises in Jiangsu province are not obvious, and backward linkagestechnology spillovers effect are significantly positive. Besides, private enterprises’access to the technology spillover effect of backward linkages is much smaller thanthat to the state-owned enterprises. In short, those factors of technology gap, the levelof industry innovation, market competition, export intensity, over-large, over high andover-fast foreign capital dependency compose hinder on inter-industry FDItechnology spillovers in Jiangsu province.Last but not the least, proposals for policy making which are hoped to bebeneficial to the optimization of external environment for the inter-industry FDItechnology spillovers, to the improvement of quality of attracting foreign investment,to deepening domestic and foreign industry associations and to the upgrading ofdomestic enterprises absorptive capacity as well based on the theoretical analysis andempirical research.