A Study On The Technology Spillover Effects Of FDI On China 's Manufacturing Industry

After finding the FDI technology spillovers in the1960s, scholars start to analysis different countries and industries, investigating the technology spillovers between intra-industries and inter-industries. Although there are lots of inconsistent conclusions, most of them are positive. China is a developing country, which has the desired of economic development and the international competitiveness promotion, establishing lots of preferential policies to acquire the FDI technology spillovers. However, China has its unique characters in economic progress, such as institutions, financing constraints and political, etc. In order to get the precise result when analyzing the spillover effects of FDI on local companies, we should add those factors into consideration.After investigating the FDI effect on total factor productivity of enterprises with different ownership types, we find that FDI has negative competition spillovers on all types of enterprises. This reveals the entry of foreign investment intensifies the market competition and enterprises don’t have enough ability to absorb the technology spillovers; Investigating FDI effect on industries with close relations, the joint ventures which cooperate with foreign capital enterprises have acquired significant positive spillovers, the non-state enterprises have acquired non-significant positive spillovers and the state enterprises have acquired significant negative spillovers. This indicates the more foreign investment enterprises have and the more close relation with foreign companies, the more knowledge spillovers enterprises can get. Then we take the high-tech industries as example to see how FDI works, we finding the state enterprises in high-tech industries have acquired positive competition spillovers, the joint ventures and the non-state enterprises have acquired the positive knowledge spillovers. FDI can promote high-tech industrial technology progress and upgrade.