Study On The Effect Of Reverse Technology Spillover And Its Influencing Factors In China 's Foreign Direct Investment

Chairman Xi first proposed the concept of "New Normal" in May 2014. The interpretation in the area of foreign direct investment is the rapid growth in the amount of investment and in a form of net foreign direct investment. For a long period of time the cheap labor, government investments, strong external demand which promote Chinese economic in the past are now unsustainable. With this background the paper studies the reverse technology spillover effect and its influencing factors. Theoretical part introduces the basic theory of foreign direct investment reverse technology spillover. The empirical part starting from Cobb- Douglas function and use BK model with appropriate improvements, the model compares the domestic R&D, domestic and foreign direct investment with data of 1985 to 2013, this paper selects 12 countries as a representative of international R&D investment. We draw the conclusion that three paths all play a role in promoting our country’s TFP. With other conditions remain unchanged, for each additional 1% domestic R&D per GDP, TFP grows 0.37%. And other conditions remain unchanged foreign R & D capital stock from OFDI and FDI increase 1%, TFP grows of 0.077% and 0.086%. This paper reviews the research on the reverse technology spillover effect of foreign direct investment influencing factors over last 10 years. And this paper chooses the home country’s human capital stock, the level of economic development and the home country R&D spending as three factors to be studied. I draw the conclusion that only human capital coefficient is significantly positive, indicating that the growth of human capital plays a significant role in promoting the foreign direct investment reserve technology spillover effect.