Research About Technology Spillover Effect On China’s Outward Foreign Direct Investment Location Choice

A country’s technological progress comes from domestic and international research and development. The reverse technology spillover effect of foreign direct investment is an effective way to obtain the international R&D resources. It embeds in the host country’s industrial chain and technology intensive areas by the way of Greenfield investment and cross-border mergers and acquisitions, using technology spillover to transfer R&D resources to the home country, which can shorten the product development cycle, prompt industry and enterprise transformation and upgrading and promote technological progress in the home country.The location choice of foreign direct investment directly affects the reverse spillover effect of technology. This paper mainly studies the following aspects across this core viewpoint. Firstly, it studies the host countries’ policy towards investment activities, social cultural environment, regional R&D resources and industrial cluster to analyze the location choice of FDI reverse technology spillover. Then the paper selects five effective influence factors, namely the host country’s per capita national income, R&D expenditures accounted for GDP ratio, the opening degree, perfection degree of technological market and the efficiency of the government management and uses mixed regression model, OLS regression analysis method and the fixed effect model to do empirical tests with ten representative national sample data in 2003-2014. The conclusion is that these five influence factors have a positive impact on the location choice of FDI reverse technology spillover in different level. So based on the analysis above, the state should expand its FDI to developed countries which have high national income and perfect technology market. At the same time, the government should constantly improve its management and service. The enterprises should increase its investment on R&D activities and enhance its technology absorption and digestion ability in order to improve the reverse technology spillover of our country.