The Study On The Reverse Technology Spillover Effect Of Zhejiang’s OFDI

Since the reform and opening up, China has attracted huge foreign investment which led to the rapid development of Chinese economy. And in recent years, with the successful accession to the WTO and the "going out" strategy, many Chinese enterprises which have completed the accumulation of capital also began to invest overseas. This makes Chinese Outward Foreign Direct Investment(OFDI) developing very rapidly, as investment scale and the stock continue to expand. The Zhejiang Province, as one of the developed provinces in eastern China, has ranked in the forefront of the amount of OFDI. In 2013, the Zhejiang Province’s OFDI flows is 5.5 billion us dollars, and the cumulative stock has reached 33.6 billion us dollars.Many scholars have demonstrated that the OFDI will have positive impacts on many aspects of the host country. In addition, some new studies found that transnational investment also has reverse technology spillover effect to the home country. OFDI as same as international trade and foreign investment is one of the important channels for international technology diffusion, which will mean more to the developing countries to acquire technology. For developing countries, OFDI can break through the blockade of the core technology by developed countries, and contact with foreign advanced technology and industrial cluster directly, and recruit local high-tech talent to internalize advanced technology. The parent company will bring the advanced technology back home through the subsidiary-parent channel, improving the technology level of the parent company and the whole industry, and ultimately promoting the technological progress of the country.Both qualitative research and quantitative research, theoretical analysis and empirical analysis are adopted in this paper, also a case analysis method is adopted in this paper. On the basis of the review of the relevant theoretical literature, theoretical analyze the mechanism of reverse technological spillover of OFDI. And then chose the Zhejiang Province as the research object and summarize the current situation of the development and characteristic of Zhejiang Province’s OFDI. Finally, collect the panel data of 11 cities of Zhejiang Province, and study the existence and regional difference of the reverse technology spillover effect of OFDI in Zhejiang Province. The empirical results show that, Zhejiang Province’s OFDI play a positive role in promoting the technology progress. But local R&D funds has a greater effect; and Zhejiang Province also has regional differences: the northeastern region’s reverse technology spillover effect is not obvious, and the Southwest’s is greater than the average level of Zhejiang Province. Therefore, excepting being active in the expansion of the scale of OFDI, Zhejiang Province should not ignore the domestic R&D funds investment. And the quality and efficiency of OFDI should be concerned too, especially to encourage the transnational mergers and acquisitions and the R&D projects which is pursuing of high technology research and development, thus make a better “going out”.