The Comparison Of FDI Technology Spillover Effect Between Manufacturing And Service Industry Of China

Under the impetus of economic globalization,foreign direct investment(FDI) has become the main form of international capital flows,large inflows of FDI has made a significant to the host country’s economic development,technical progress and the upgrading of industrial structure.Technology spillover effect,it usually refers to the international investors of developed countries investing and building factories in the host country,advanced production technology,management experience brought by FDI and other forms into local enterprises,making the local technical levels and the productivity improved,while these benefits have not been competely acquired by multinational firm’s subsidiaries.It can be seen that the technology spillover effect is an external effect,and it is the embodiment of economic externalities.Manufacturing and service industries are two major areas of largest recipient of FDI in our country,comparative study on manufacturing industry and service industry of FDI technology spillover effect,is not only a valueable issue in academic research,and is one of the important policy guidance,it is not only related to the evaluation of the introduced foreign investment policy to our country,but also related to its future trend.Therefore,the comparison of FDI technology spillover effect between manufacturing industry and service industry both has a theoretical and practical significance for our country to utilize FDI better.Firstly,based on the study of domestic and foreign scholars,paper sorts out the theoretical basis about FDI technology spillover effect,and defines the related concepts,and then analyzes the current situation of FDI in our country,paper also launch the research combined with scope of manufacturing and service.After that,from the two aspects of channels and influencing factors, manufacturing industry and the service industry FDI technology spillover effect was divided into the following four effects:demonstration and imitation,market competition,human capital flows and industries association.Combining with previous research results and considering the availability and quantification of the datas,paper divide the factors of the manufacturing industry and the service industry FDI technology spillover effect in the following four impact factors:the level of economic development,the degree of economic openness,the level of human capital and the level of infrastructure. Paper conduct further discussion of FDI technology spillover effect of manufacturing and service,and lay a theoretical foundation for the empirical part.In the empirical part,paper firstly uses the DEA-Malmquist index method respectively calculate the Total Factor Productivity(TFP) of manufacturing and services of Chinese 26 provinces from 2003 to 2014,utilizing the panel data model,paper develop the empirical comparison of FDI technology spillover effect and its influencing factors between manufacturing and services,and respectively by the scope of the whole country,east and midwest districts.The study found that:Firstly,from the perspective of the whole country,manufacturing FDI shows a negative spillover effect while service FDI shows a positive spillover effect.Besides,FDI technology spillover effect of need to combine some of the local conditions,through the influence of cross terms on TFP in manufacturing and services industry : The level of economic development and human capital have a positive effect on FDI technology spillover of manufacturing,while have a negative effect on the service.Both the effect of the degree of opening economy on FDI technology spillover of manufacturing and service are not significant. The effects of infrastructure level on FDI technology spillover effect of manufacturing and service are significantly positive.Secondly,from the perspective of regions,east and midwest manufacturing FDI shows a negative spillover effect,and the negative effect of the east is greater compared with midwest.But east and midwest service FDI shows a positive spillover effect,and the positive effect of the east is greater compared with midwest.In addition,the study also found that the influence of different factors on FDI technology spillover of manufacturing and service in east and midwest regions present different effects.This shows that in the process of introductiom and policy formulation of foreign capital in manufacturing and service industries,various regions need to consider their local conditions and their characteristics and degree of development.Finally,paper puts forward some proposals for government for reference according to the conclusions.Paper has launched the elaboration from three aspects,from improving the quality of foreign investment,the investment environment and the human capital,provide some relevant suggestions for our country’s manufacturing and service industry to better use FDI and gain positive FDI technology spillover effect.