The Influence Of ODI On Domestic Technology Catch-up In Emerging Economies

As China’s sustained economic growth, China’s outward foreign direct investment (ODI) has achieved11consecutive years of growth, and the outwardly-oriented internationalization of Chinese enterprises has attracted scholars’ attention. Meanwhile, China, as a later-comer in technology, has paid much attention to industry technological catch-up and focus on technology endeavor in order to catch up and surpass the technological-advanced country. Under the background of economic globalization, the international competition environment has effect on the home country’s technology catch-up, and ODI may offer new opportunity for domestic technology catch-up. Although, many scholars argued that ODI may be more conducive to technology catch-up than the FDI, there hasn’t reached a consistent clolusion about the influence of ODI on domestic technology catch-up. That’s because there lacks analysis about the influencing mechanism of ODI on technology catch-up under different context. What’s more, the emerging econmies have unique features in terms of ODI, research about the relationship of ODI and domestic technology catch-up in emerging econmies is still lacking, and the influencing mechanism stays unsure.This study focus on the influencing mechanism of emerging econmies’ODI on domestic technology catch-up, which takes Chinese high-tech industry as the specific research object. Based on the review of current research about the effect of ODI on technology catch-up, indigenous R&D and technology import, this study analyze the influencing mechanism of ODI on home country’s technology catch-up, mainly concerning about whether ODI can promote home country’s technology catch-up, and whether ODI can promote indigenous research and development and technology import and eventually promote technology catch-up. This study also analyses the moderate role of ODI location, and this study uses7years panel data of16segmentation of Chinese high-tech industry from2005to2011.Findings:(1) ODI of high technology industry has positive promoting effect on domestic technology catch-up and indigenous R&D. When the location choice is technological-advanced country, the effect will be more significant.(2) ODI of high technology industry has negative effect on domestic technology import, and the location choice of technological-advanced country has a negative moderate role on this relationship.(3) Indigenous R&D of high technology industry has positive effect on domestic technology catch-up, and indigenous R&D plays mediate role in the relationship of ODI and domestic technology catch-up.(4) The role of technology import on home country’s technology catch-up is not significant. These findings enrich theories about the effect of internationalization on home country’s technology catch-up, and explain the specific influencing mechanism of ODI on domestic technology catch-up, viewing the ODI can promote the indigenous innovation and finally promote the domestic technology catch-up, while has negative effect on domestic technology import. Meanwhile, this study provides advice for ODI management and policy making, also explains the rationality of the current policy in supporting indigenous innovation, and offers the correct guidance to technology import in high technology industry.