The Reverse Technology Spillover Effect Of China’s OFDI

With the development of economic globalization, the technology progress of a country not only depends on the input of domestic R&D, education and talents, but also the trade, foreign direct investment(FDI) and outward foreign direct investment(OFDI), however, on the empirical test, the scholars mostly focused on the trade and foreign direct investment, but relatively less on the technology spillover from the outward foreign direct investment. At present, China is the third largest foreign investment country in the world, the role of OFDI become more and more important in the spillover of technology, however, research on the outward foreign direct investment mostly based on the provincial panel data, but less on the industry. So this paper try to explore the reverse technology spillover from outward foreign direct investment based on the industry.Firstly this paper will introduce the theories of foreign direct investment, and then will analyze the conduction mechanism of reverse technology spillover based on the theories and a comprehensive analysis of the history and characteristics of Chinese outward foreign direct investment, after estimating the total factor productivity by using China’s eight industries panel data with the Malmquist index non-parametric method, this paper will study that how international R&D stocks are interacted via Chinese outward foreign direct investment(OFDI) with domestic R&D, and try to explore if there exists any effect on the total factor productivity in the eight industries.The empirical results show that the international R&D has a certain effect on the total factor productivity through OFDI, but it is not significant to affect the technical advance.