The Effects Of Foreign R&d Embeddness To Chinese Market Innovation Performance

The embeddedness and rational use of foreign R & D investment has an important influence on the market innovation performance for the host country. However, with the rapid rose of foreign direct investment in China, the academic community has a dispute on the innovation level and the performance improvement of the foreign investment in the innovation and development of foreign investment. In view of this situation, combine with the truth that foreign R & D investment capital spreading in the provinces of China, base on network embeddedness theory, consider the "relational embeddedness" and "personal embeddedness", this paper bulid a foreign R & D embedding index measurement system, with foreign personnel R & D embeddedness and other five key embedded variables. From the perspective of industry chain analysis, this paper divide the research and development of innovation process into two stages – “Technology development” and “Products transform”. By using the nonparametric DEA-Malmquist method, the market innovation performance of the industrial enterprises in China in 2005-2013 was obtained.By synthesize the existing literature, this paper put the government support and other 5 control variables into the comprehensive impact model which measures the impact of foreign R & D investment on Chinese market innovation performance. Firstly, the initial linear panel analysis of foreign R & D embeddedness index to the market innovation performance, shows that the co-integration relationship exists between the foreign R & D embeddedness and market innovation performance with other 5 control variables. For the test result of the model is not ideal, taking into account the possible nonlinear problems, this paper add the square of the market innovation performance into the model, and better fitting results show the existence of a nonlinear relationship. In order to accurately measure the effect of foreign R & D embeddedness level on innovation performance of China’s market, and the possible existence of a threshold value, so this paper build a double threshold regression model. The model verifies the existence of the threshold for foreign R & D embeddedness and shows a dual-threshold effect of the R & D level in R & D innovation three stages. The threshold interval of foreign R & D embeddedness in the stage of the overall market innovation stage is [10.25%, 30.42%), in the Technology development phase the threshold interval is [1.74%, 7.56%), and in the Products transform stage threshold interval is [12.49%, 30.42%), combine with the estimate parameters of threshold model, that foreign R & D optimal embedding level should be in [7.56%, 12.49%). While in the same time, the test of the control variables show that the government support and infrastructure have a significant positive influence on the market innovation performance in Technology development phase, while the negative effect of market property structure is significant, but the performance promotting effect of human resources level in China is weak at the present stage.Therefore, this paper proposes the policy recommendations as follows: firstly, take attention of foreign R & D embeddedness index as a "barometer", secondly, treat different aspects of the research and development of the value chain, thirdly, reduce the high technology industry market access threshold and the transformation of government functions and so on.