Study Of Technology Spillover Effects Of Foreign Direct Investment In China

Development economists believe that the economic growth of one countrymainly depends on technology progress,and technology progress is corecompetitive capacity of a country.The level of technology in a country or districtnot only relies on domestic R&D capacity,but also benefits from absorbing all kindsof technology spillovers from FDI.Therefore,the developing countries regard theabsorption of technology spillovers from FDI as an important means of sharingadvanced technology in the world.Technology spillovers of FDI will help toimprove the level of technology in the host country, improving the level oforganization and management,and promoting the development of endogenouseconomic growth.Since the reform and opening up and30years’absorbing foreigncapital,FDI in China has achieved rapid development.The aim of the initialintroduction of FDI,making up funds and foreign exchange gap,has been solvedwell.From now on facing the huge foreign exchange reserves and the highhousehold saving rate,how to make better use of the various resources andtechnology spillovers of FDI,to promote Chinese technological progress and theendogenous economic growth has important strategic significance.With the deepening development of the market economy and the continiousoptimization of the socio-economic structure,China joined to the WTO andconnected with other countries more and more close.It is clear that Chineseeconomy has entered a new stage.By the end of2011,China has actually usedforeign investment117.698billion U.S. dollars.The foreign economy not onlypromote the growth of economy in China,but also improving the level oftechnology through all kinds of ways.As the above considerations,the paperreciewed the domedtic and international theories of the technology spillovers ofFDI,regarded the technology spillovers mechanism as a clue,analysed the fourchannels of the technology spillovers effect,such as the imitation effect、the competition effect、the human capital flowing effect and the linkage effect.Then thepaper describes briefly the history of FDI in China and the case of FDI in theregional and industry level,and provides a theoretical premise for the belowempirical analysis.According to Feder’s economic model for two departments,thepaper makes empirical analysis for the technology spillovers of FDI in the regionaland industry level.The result shows that the technology spillovers of FDI in Chineseregional and industry level is actually exist,and the technology spillovers in industryis significantly less than the region’s.Finally the paper gives some advices on howto absorbing the technology spillovers of FDI, promoting technology progress andeconomic development in our country.