| With the economic globalization, the "going out" has become an important development strategy for many countries. Since the reform and opening up, in order to attract FDI, China has been giving preferential treatment to foreign investors. In recent years, however, overcapacity, slowing inflows of foreign capital, exchange rate instability and other problems start to exist. Under the economy slowdown and China’s "New Normal" background, there is strong impulse for domestic capital to go out. After the global economic crisis in 2008, the United States, Germany and other developed countries, strive to explore a way of economic development from the technology innovation. Countries with stronger innovative ability can better respond to economic crisis. Recently, trade protectionism is prevailing in European and American countries and the advantage of China’s traditional manufacturing industry has gradually been lost. Under the decline of European and American economy, the U.S. intends to promote TPP and TTIP without China to make new rules of international trade. Faced with the new foreign and domestic situation, China needs to enhance its national innovative ability and promote competitive advantage.China is an important investing country in the world, with its OFDI flow increasing every year. In 2013, the flow of China’s OFDI was 10.784 billion dollars, which was the highest point in history and ranked the top three investing countries in two successive years. In 2014, the amount reaches 12.312 billion dollars, increasing by 14.2%. The proportion of China’s OFDI flow to developed countries has been increasing. The OFDI of enterprise can produce more income, reverse technology spillovers and competitiveness of brand, which coordinates with basic environment to enhance China’s innovative ability. The introduction of technology, trade and FDI can also affect the national innovative ability to a certain degree, but there are disadvantages in these practice when compared with OFDI. Further, the conduction mechanism and spillover effect of OFDI to different countries on China’s innovative ability is different.The paper conforms to the research idea of "literature review-theoretical analysis-empirical analysis-suggestions", combining qualitative and quantitative analysis, theoretical and empirical analysis and comprehensive comparative analysis. The research is mainly on how to evaluate innovative ability, whether OFDI can enhance China’s innovative ability, whether there is difference of effect of OFDI on China’s innovative ability, compared with international trade and FDI and whether there is different effect of OFDI to different host countries on innovative ability. Based on related literature review on OFDI and innovative ability, in the paper, firstly evaluating index of innovative ability is created. Then this paper analyzes the conduction mechanism of effect of OFDI on China’s innovative ability. The inter-provincial panel data is collected to make empirical analysis of effect of OFDI on China’s innovative ability. SFA, fixed panel effect and GMM is used in the empirical analysis and at last policy recommendation is made.Results of the study show that there is positive spillover effect of OFDI on China’s innovative ability. The effect exhibits regional difference and is more obvious in the western region. The OFDI and import trade have positive effect on China’s innovative ability, but the effect of introducing foreign technology is not significant. FDI has negative effect on China’s innovative ability. Through difference GMM, the endogenous problem can be solved, which deeper suggests that OFDI can enhance innovative ability. Host countries are divided according to their development level, and OFDI in different host countries have different effects on China’s innovative ability. And there is positive effect in general. But compared with developing and non-OECD countries, the significant positive effect of spillover effect of OFDI in developed and OECD countries is more obvious. |
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