| With the development of global economic integration, the situation is becoming riper that human resources, capital, knowledge and other resources flow freely across the globe and more and more countries pay close attention to foreign direct investment (FDI). China’s eastern coastal regions are more developed comparing with the other regions and participate in the development of economical globalization more actively. In recent years, Jiangsu Province takes its eastern coastal area advantage, insists the economic strategy of "bringing in and going out" to attract FDI worldwide and creates many economic development. Industry is the first choice of foreign capital to invest in, and by 2012, the industrial enterprises above designated size in Jiangsu Province have used foreign capital amounting to 3.27 trillion Yuan, accounting for the fifth of the foreign capital used by the whole industrial enterprises above designated size in China. The Document No.1 of 2014 emphasized the importance of farming industry in the development of the whole industry once more. By now, the amount of enterprises of farming industry accounting for 1/3 of all the enterprises of industry in Jiangsu Province, and the use of foreign capital has increased to 522.2 billion Yuan, which has increased 362.5% from 2002. The reason why so many countries pay close attention to FDI is that the advantage of FDI not only it can bring capital to the host countries, but also advanced technology, human resources and management experience, so it can make spillover effect on the domestic-funded enterprises by demonstration, the mobility of human resources and competition which potentially improve the utilization capacity of domestic-funded enterprises. Therefore, evaluating technology spillover effect of FDI on farming industry in Jiangsu Province from the economic point objectively has important theoretical and practical significance for Jiangsu Province to make proper and effective use of FDI in the future.The purpose of this study is to verify the existence of technology spillover effect of FDI on farming industry in Jiangsu Province, and measure the degree of horizontal spillover, forward associated spillover and backward associated spillover, and on the basis. make some relevant policy recommendations.First of all, the article defines the relevant concepts and makes a review of status of literature to point out the significance of the study, and introduces the content and methods of the study. Then, the article gives detailed description of utilization status of FDI of farming industry in Jiangsu Province, and contracts the productivity between domestic-funded enterprises and foreign-funded enterprises by the method of DEA, the results shows that there is obvious gap which proves that the precondition exists that FDI has technology spillover effect on domestic-funded farming industry. Combining the theory and the panel data of farming industry from 2002 to 2012, based on the expanded Cobb-Douglas production function model, the study makes a panel data regression model to test technology spillover effects of FDI, the result shows that FDI has overall technology spillover effects on domestic-funded farming industry. On the basis, the article makes further research on the ways of technology spillover effect, which includes horizontal spillover, forward associated spillover and backward associated spillover, the results indicate that horizontal spillover does not exist, backward associated spillover exists and is statistically significant, which means that in the process of the upstream domestic-funded industry supplying raw materials to downstream foreign-funded industry, forward associated spillover generates. While forward associated spillover also exists, but is not statistically significant. Thus, the backward associated spillover is the main way for the technology spillover effect of FDI on the farming industry in Jiangsu Province. Finally, the empirical models are summarized, in general, the empirical results are reliable and valid.Finally, the article puts forward relevant policy recommendations based on the conclusions, and conducts the research prospects. Improving a fair competition mechanism and creating good investment environment to encourage introducing foreign direct investment are important for and domestic-funded farming industry in Jiangsu Province. The domestic-funded farming industry should absorb technology spillovers actively and enhance the capacity of digestion and absorption. What’s more, it should pay attention to the importance of the development of industry contacts, and try to join the industry chain actively to promote FDI bringing out perpendicular technology spillovers and improve the market competitiveness of domestic enterprises. |
