A Study Of The Impact Of OFDI Reserve Spillovers On Innovation Capacity:Regulatory Effects Of Economic Openness

Since the implementation of “the going out” strategy, outward foreign direct investment in China has always experienced a rapid growth. In 2013, there were 15300 domestic investors that established 25400 foreign direct investment enterprises abroad and distributed in 184 countries(regions). The total foreign direct investment(stock) had amounted to 660.48 billion US dollars and ranked eleventh place in the world. It shows that China’s foreign direct investment has entered a stage of rapid development. Outward foreign direct investment has become an important economic initiative that can help the capital of a country participate into international market and international labor division. It is not only beneficial to improve the efficiency in the use of home country capital and but also to improve the capability of independent innovation. So the main problems discussed in this paper are: how does OFDI affect the enterprise independent innovation, whether does China’s OFDI reverse technology spillovers really promote the independent innovation ability of the enterprise, whether there is a difference between different region’s OFDI spillover effects? Which factors will affect the play of OFDI backward spillover effects?This paper bases on OFDI reverse technology spillover theory and also on reading a large number of relevant literature. Firstly, it sorts out former studies of OFDI reverse spillovers’ impact on domestic independent innovation capacity. Then the article analyses the current status of China’s foreign direct investment, independent innovation capacity and the motivations of enterprises’ foreign direct investment. It also analyses the mechanisms of OFDI reverse spillovers’ impact on domestic independent innovation capacity and the main domestic factors which affect the OFDI reverse innovation spillovers. After that, the paper joins the economic openness as a moderator variable, then analyses its impact on economic growth and efficiency, China’s OFDI and technology progress. Once again, the study puts forward the theoretical model and research assumptions of this paper. At the end of the paper, the research takes provincial panel data as the research object and uses STATA software to carry on the empirical analysis. A model is constructed to test China’s OFDI adverse spillovers’ impact on domestic independent innovation capacity, and then it divides economic openness into trade openness, production openness, financial openness and investment openness and establishes a model that economic openness regulates the relationship between OFDI reverse spillovers and innovation.The empirical result shows that OFDI had a positive effect on China’s independent innovation capacity. But by dividing the whole country into the east, middle and west to test respectively, it was found that east region has more obviously positive effects than other two regions on four angles regulating OFDI reserve spillovers. Meanwhile central region is mainly affected by production openness and west region is affected by investment openness.Based on the above analysis, this paper gives some useful advices: on one hand, the government needs to create more favorable environment to promote enterprises investing abroad. On the other hand, enterprises should pay more attention to attract some talented persons, enhance their ability to innovate. In addition, we also improve the level of economic openness to absorb the OFDI reverse technology and knowledge spillovers.