Research On The Technology Spillover Effect Of Fdi And International Outsourcing In China’s Service Industry

As global service industry develops rapidly, internationalization of service has become a significant characteristic of globalization. China, a newly emerging developing country, has gradually become part of the process as a host country. Meanwhile, booming of IT industry has diversified the modes of service internationalization:first dominated by FDI in1990s, and then comes offshore outsourcing, the CO—existing of which two is drawing the attention of academia nowadays. But the differences in their contents, industrial structures, degree of technology intensification and demand of human resources has entitled them with different technique effects on China, and also some potential relation. This paper aims at proper political advice for China to maximize its technique via technique comparison on the two models, which involves mathematical and empirical analysis.Depending on introduction, the paper is divided into3parts:First to introduce the conceptions and differences, for analyzing the reasons of differences between their technique effects on China; Secondly, base on The Cobb Douglas function, this paper establishes a mathematical model to conduct the comparison; Thirdly, to quantify the thresholds by using data of China’s service industry, combining regressing analysis we get the comparing result on the perspective of whole service industry and specific service departments, in addition, the paper assumes and the proves the promotion of FDI on offshore outsourcing, which can pose an impact on the result of comparison. and make FDI based on FATs a necessary factor for China to introduce its undertaking policy; Above all the comparison results, this paper proposes a set of political advice for China to maximize its technique when undertaking FDI and offshore service outsourcing.Basing on the previous research, this paper gets several conclusion:First, differences between the features of the2models result in differences between their technique effects; Second, FDI Can better improve China’s technique than offshore outsourcing as of the whole service industry and traditional service departments; on the other hand, the latter performs better than the former as of the new service departments, which also result in the policy preference over different departments; Third, FDI based on FATs Can promote offshore outsourcing to some extent. China can improve its technique by boom this kind of FDI in the new service departments.