The Theoretical And Empirical Research Of Technology Seeking OFDI To Promote China’s Global Value Chain Upgrading

Under the division mode of global value chain (GVC), developed countries which owns technology and management advantages occupy the high value-added links on both sides, while developing countries locates on the processing link, which is low value added. As one of developing countries, the technology and management resources as well as the R&D ability in China are both limited. Technology seeking OFDI becomes an important way to improve the ability of R&D and realize the goal of GVC upgrading.This paper first analyses the characteristics of China’s technology seeking OFDI from four aspects of subject, location, industry, and the entry mode, taking the OFDI to the United States and European Union as example.The part of theoretical research first divides the mode of GVC upgrading into three kinds of bottom upgrading, both sides upgrading and inter-chain upgrading, respectively summarizes the mechanisms of technology seeking OFDI to promote GVC upgrading. Technology seeking OFDI can promote China’s GVC upgrading from the bottom through three effects of senior elements supply, scale economy and product value-added enhancing. Technology seeking OFDI can promote China’s GVC upgrading from both sides through three effects of reverse technology spillover, feedback of R&D achievements and international marketing effect. And technology seeking OFDI can promote China’s GVC inter-chain upgrading two effects of dynamic capabilities improving, inter-industry technology spillover.On the basis of theoretical research, this paper then uses path analysis for empirical research to identify whether the path concluded above can promote China’s GVC upgrade and its size. Path analysis results show that the technology seeking OFDI can significantly promote China’s GVC upgrading. It will promote GVC upgrading from bottom by improving the value added of production process achieved by domestic enterprises, promote GVC upgrading from both sides by reverse technology spillover effect and feedback effect of R&D achievements, and promote GVC inter-chain upgrading by dynamic ability enhancing effect.Finally, this paper summarizes the conclusions. Suggestions are proposed accordingly.