Technological Spillovers From FDI In China

This paper aimed to study the technological spillovers from FDI in China. Itmainly used the panel data from regional and industry levels to analysis thetechnological spillovers from FDI. On one hand we divided China’s27provinces intoeastern, central and western regions, and we studied the technological spillovers fromFDI with the regional panel data from1990-2010.On the other hand, we studied thedifferences of technological spillovers deeply with the industry data from2001-2010.From the study of China’s economy as a whole, we found that there exists apositive significant spillover effect, but there were a lot of other problems such as thedifference between different regions, the differences between inter-industry andintra-industry. Specifically:Empirical analysis of regional data showed that there were different spillovereffects in different regions because of the imbalance of regional economicdevelopment and technology gaps. The technological spillover effects were higher ineastern region and lower in western region. Empirical analysis of industries’data showed that, the spillover effect of domestic labor was greater than the spillovereffect of domestic capital. And we found that there existed a negative significantspillover effect of the horizontal spillover effect, but the vertical spillover of FDImade our economic better, and the backward horizontal spillover effect was greaterthan the forward spillover effect.Finally, based on theoretical and empirical research, we came up with some basicconclusions, and some basic advices to promote the balance of the regionaldevelopment and industrial development, such as: Firstly, the governmentdepartments should guide FDI moves from the eastern region to the central andwestern region steeply; Secondly, we should make different policies to attractinvestment based on the different level of the development; thirdly, our governmentshould continue to increase the intensity of internal reform, and make more efforts toimprove the reform of state-owned enterprises, to solve the problem of "countryforward and people backward" fundamentally. Lastly, we should pay more attentionto improving the quality of the introduction of foreign capital.