Research On Technology Spillover Effect Of Foreign Direct Investment

As a form of international capital flows, foreign direct investment has beome one of the most important ways to promote the technological progress for host countries (especially for developing countries). By learning and imitating of foreign advanced technology, the local enterprises can upgrade their own technological level with lower cost through the effect of technology spillover. In recent years, as the economic opening degree of China being improved constantly, foreign direct investment has been developing rapidly and the technology spillover effect plays an important role in the economy of China. With the view of absorptive capacity, this paper analyses the influencing factor of technology spillover of foreign direct investment, and attempts to put forward some relevant policy proposals.Technology spillover effect of FDI is a long-term, systematic process, which is not only about the technology supplier bringing the advanced production technology to host, but also about the host using its corresponding absorption ability to translate into national productivity. So, the absorptive capacity of the host contries plays a vital role in technology spillover effect. This paper is divided into four main parts: the first part is the introduction, which includes introducing the research background and research significance, reviewing the related domestic and overseas literatures, stating the fundamental research method and pointing out the innovation and shortcomings. The second part is the theoretical part, discussing the theory of foreign direct investment, FDI technology spillovers, and absorptive capacity. This part also discusses the mechanism and the restricting factors of technology spillover, and the mechanism and influencing factors of absorptive capacity. The main influencing factors include human capital, independent research and development capabilities, domestic and foreign technology gap, the open degree of economy, market competitive degree and so on. The third part is the empirical part, including the empirical test of technology spillover effect and absorptive capacity of china. Firstly, establish a two sector spillover model, and conduct the empirical testing regarding the technology spillovers using the economic data during1998-2010as a research sample. The result shows that the technology overflow phenomenon of China is obvious. After that, this paper builts a multiple regression model, inspecting the effects of human capital, degree of opening to the outside world, the technology gap and the capability of independent innovation. The test result shows that the improvement of human capital, the improvement of independent innovation capability, and the narrowing gap between domestic and foreign technology are benificial to the promotion of technology spillover effect. However, the constantly raising the level of economic opening degree is not conducive to technology spillover. The fourth part is the conclusion of the study and policy recommendations. The conclusion is drawn from the theoretical and empirical research. According the conclusion, this paper offers some relevant policy recommendations, including mantaining a reasonable level of domestic and foreign technology gap, improving the level of human capital, improving the ability of independent innovation and maintaining a reasonable level of economic opening degree.The innovation of this paper mainly lies in two aspects. Firstly, this paper view the technology spillover effect from the absorptive capacity perspective, rather than simply study on the spillover effect. Secondly, considering the technology spillover absorptive capacity is synthetically influenced by multiple factors, rather than one individual factor, this paper employs multiple regression analysis to study the synthetically influence of domestic and foreign technology gap, human capital level, the ability of independent innovation and opening level to the outside world, which is different from some past scholars who used single factors for empirical research.