Study On Foreign Direct Investment Technology Spillover Effect In The View Of Absorptive Capacity

After the reform and opening up, China has implemented the opening-up policy for the purpose of’market for technology’. As an innovative resource of capital, technology and management, Foreign Direct Investment is a main way to absorb foreign advanced technologies for the host country. However, whether the host country can effectively absorb the spilled technologies from FDI depends on its absorptive capacity. Therefore, discussing how the absorptive capacity affects FDI technology spillovers is very important for the host country.The domestic and foreign related literature is reviewed, and the basic theories of FDI technology spillovers and absorptive capacity are analyzed to find out the absorptive capacity factors which affect the FDI technology spillovers significantly.The mechanism in which absorptive capacity affects FDI technology spillovers is analyzed from the evolutionary economics perspective. The Darwin’s evolutionary principle of’variation, selection and genetic’in biology is introduced and translated to’foreign direct investment, absorptive capacity and technology spillovers’. The analytic not only follows the basic evolutionary principle of Darwinism, but also reflects the main feature of economic evolution. On the basis of the mechanical syllogism of’foreign direct investment, absorptive capacity and technology spillovers’, the endogenous and interactive relations between the three mechanisms are analyzed, and the’interaction between foreign direct investment mechanism and absorptive capacity mechanism’, the’interaction between technology spillovers mechanism and foreign direct investment mechanism’, the ’interaction between absorptive capacity mechanism and technology spillovers mechanism’are established. The cyclic mechanism just mentioned occurs in all levels of the economic system. Therefore, the three mechanisms and the interaction between these three mechanisms become a complete structure to analyze FDI technology spillovers.In the empirical research, an empirical model is established based on Cobb Douglas production function, and is tested with34years’data from1978to2011in China. The empirical results reveal that knowledge base, R&D investment, communication with the outside and the incentive for innovation of the enterprises in China improve the absorptive capacity, thus promoting its Foreign Direct Investment technology spillovers effect.