The Technology Spillover Effect Of Producer Services FDI In China

At present,the economy of China has entered a period of restructuring and development,the economic growth has been slow down, and the economic structure needs to be upgraded. All these have put forward higher requirements to China’s economic development. If we don’t adjust the dynamic mechanism of economic development timely, China will not be successful across the "middle income trap". The introduction of FDI which has been an important means for developing economy and improving the level of technology should conform to the trend of economic development, change the introduction of structure, and focus on technology-intensive and capital-intensive industries. Since the Producer Services FDI is capital-intensive and technology content is relatively high in the service sector, it is in China’s favor in recent years. Its development not only can optimize the economic structure, but also has a strong industrial driving effect. Therefore, including the technology spillover effect of Producer Services FDI in the study framework is of great significance.Based on the analysis of New Economic Growth Theory, New Economic Geography, and other related theories, this paper firstly uses the panel data model for period 2006-2011 of 24 provinces in China to research the inter-industry technology spillovers of Producer Services FDI in the east, the middle, and the west of China. The results showed that Producer Services FDI has significantly positive technology spillover effect in the east, while there is no significant technology spillover effects in the middle and the west. And the level of economic development has a threshold for technology spillover effect within industry of Producer Services FDI, but human capital and the level of financial development don’t have thresholds for technology spillover effect within industry of Producer Services FDI. What to be sure is that the higher the level of them, the more easily they can promote the generation of technology spillover. Secondly, the paper uses Durbin Model for the research of regional technology spillover effect of Producer Services FDI. The results showed that Producer Service FDI in China has obvious spatial technology spillover effect and this effect mainly depends on geographical distance. As the aspect of spatial, human capital has a significant role in promoting the development of Producer Services, however the institutional environment and the level of financial development don’t promote it significantly in the current situation. What’s worse,the institutional environment have hindered the development of Producer Services in our country. Finally, according to the empirical results, and the reality of our country, the paper makes specific policy recommendations.