The Study On The Influence Of OFDI To China’s Innovation Ability

According to the new economy growth theory, innovation is the source of a country’s technological progress and growth. One country can increase the accumulation of R&D to improve its technological level by itself or international spillovers. With the strategy of “going out” carried out, the scale of OFDI expands increasingly. In this context, it is necessary to have a research on the function mechanism of OFDI inverse technology spillovers. It is not only of great theoretical significance, but also help direct the management of OFDI.Based on the relative literature, this paper presents the current situation of China’s OFDI and innovation.We put the OFDI reverse technology spillover effect as a clue, trying to explain the following questions: Does OFDI has an inverse technology spillover effect? What’s the difference between different flows of OFDI? What’s the influence to the three different kinds of Patents? On the basis of theoretical analysis and empirical analysis, qualitative analysis and quantitative analysis, this paper makes the following conclusions.Firstly, the accumulation of domestic R&D capital is still the main way to improve the innovation ability of a country, but the OFDI inverse technology effect can’t be ignored. Although the empirical results show that domestic R&D capital plays a greater role than the OFDI spillovers in improving our country’s innovation ability. But the speed of accumulation is slow and the scale of China’s OFDI is increasing greatly. So the function of OFDI can’t be ignored.Secondly, OFDI inverse technology spillover effect is different between countries. The results show that the flow of OFDI to developed countries makes a great contribution to the innovation output while the flow of OFDI to developing countries doesn’t have a significant positive effect. Therefore, China should increase investment scale to the developed countries.Thirdly,different flows of OFDI have different mechanisms,producing different effects on the innovation output of our country. For flows to developed countries, it contributes to innovation ability mainly by transferring technology. In empirical terms,the flow to developed countries plays a positive role in increasing the utility type patents. For flows to developing countries, it contributes to innovation ability mainly by profit feedback mechanism. In empirical terms, the flow to developing countries plays a positive role in increasing the design type patents. So it’s necessary to make full use of all the mechanisms to improve the innovation ability.