Threshold Of Technology Gap Towards Technology Spillovers Of FDI

Now, China is the largest developing country in the world, and the world’s secondlargest economy. The history of China development is the development history ofreform and opening up, which is also a history of the development of FDI investment.WhilecurrentlyChina attractsa lot of FDI investment. China’s economic developmentand improvement of technical level have great relationship with FDI. This problem hasattracted much attention. So the study of the influence of FDI on Chinese domesticenterpriseshas important practical significance and theoretical value.Technology Spillovers of foreign direct investment of domestic enterprises in the hostcountry, also is called the spillover effect of the FDI. It is always the focus of the studyrecently. According to the domestic and foreign literatures, the technology spillovereffect of FDI comes from the perspective of enterprises. The mainmechanismofspillover effect reflects in five aspects:competition effect, demonstrationand imitation effect,industrial linkage effect, talent effect, R&D effect. Therefore, basedon the existing literatures, we conclude the development of FDI spillovers theory andempirical study and find out the mechanisms on firm-level FDI spillovers. Byintroducing roles of technology gap into the quality ladder endogenous growth model,this paper shows that there is the threshold value, which results in the non-linearevolution property of technology spillovers of FDI. And with the integration ofChinese manufacturing industry data, it proved that the spillover effect of technologygap for the FDI of our country exists threshold effect, so that the foreign directinvestment enterprises have the different technology spillover effect of different thedomestic enterprises with different technology gap.After the study of the technology spillover condition of whole manufacturing industryin our country, this paper also study the manufacturing industry with differenttechnology intensive, we found that they also have differentthreshold value, after theanalysis of the threshold effect of different technology intensive manufacturing degree,R&D effects on high technology industry technology level significantly play promoterole, but the role of other technologies for industry level is uncertain; state-ownedenterprises will also promote the technical level of the industry except of the hightechnology industry.The technology on China’s Total Factor Productivity(TFP) alsohave different impact on the different technology intensive industries, but the higher technology intense industry technology gap is big and will weaken the FDI technologyspillover effect, which is certain.After all,the overall level of technology of our country is rising after the accession tothe WTO. But according to the enterprises of different technology intensive, we shouldhave different strategies in the introduction of FDI and its own development issues. Firstof all, for the industry of low technology intensive degree, the aspect that thetechnology gap may occupy is relatively small, so even if the technology gap betweenthe FDI and the domestic is relatively large, but the spillover effect would be moreobvious and the gap can be quickly absorbed. Secondly, for the higher technologyintense industry, when the technology gap goes beyond a certain threshold, the spillovereffect of FDI will get relatively poor. For this type of industry, the model of appropriateimitation is feasible to improve the level technology quickly. Because of the existenceof the inherent law of diminishing marginal, we must change the mode of developmentfrom imitation to innovation, which is not only the economic development ofendogenous choice.It is the essential guarantee of the sustainable development ofeconomy, especially the high technology intensive industry, which should be graduallymoving towards the endogenous development road.If not change the exported road, it isbad to the development of domestic technology level.