Empirical Research On The Technology Spillover Effect Of Foreign Direct Investment In China

Since the 1990 s, China is undergoing sustainable rapid economic development, accompanied by the investment demand increased year by year. In the process of expanding investment, foreign direct investment has become one of the important ways to realize the investment scale and borrow construction fund, and also has become an important force of the source of funds in the economic construction in our country. Entering into the 21 st century, with the world economic integration deepening, foreign direct investment in the development of China's national economy plays an increasingly important role. Along with our country joining WTO, APEC, the Shanghai cooperation organization, China-Asean Free Trade Area, China-Australia Free Trade Agreement, Bilateral Investment Treaty negotiations, China-EU Bilateral Investment Treaties of negotiations, we continuously deepen the opening to the outside world and the cooperation with outside world. China's voice in the world economic stage are increasing day by day. Although our country is the second largest economy in the world today, after the United States, the r&d input of government and enterprise is not enough to support the rapid development of the innovation ability and rapid increase in the productivity because our country's capacity for independent innovation and the gap between the developed countries is also very huge. And the overall technology level in our country is still at low level. A lot of capital, knowledge, management experience and advanced technology are brought into into China with FDI from the developed countries. Especially as countries and regions of the highest level of economy and technology, the European Union, the United States and Japan are the origins of the world's most advanced technology and management experience, are the important parts of foreign investment our country are absorbing, and become the most important sources to obtain key core technology to our country. Through the introduction of the direct investment from European Union, the United States and Japan, China can effectively learn and absorb and digest the advanced management experience and technology, so as to promote its own technological progress, and eventually translate into higher productivity level, further optimize the quality of our country's economic development, and realize the transformation and upgrading of economic development in China, which is so called the FDI technology spillover effect. But the domestic academic circles of our country cannot reach an agreement on the practical effect of the open policy which is called “exchanging market with technology” put forward in 1992,question whether foreign direct investment bring about the technology spillover effect on the total factor productivity in China.In this paper, on the basis of related literature at home and abroad, at first, technology spillovers approaches of foreign direct investment are analyzed in theory. Next, different aspects of the characteristics and present situations of the FDI from the European Union, the United States and Japan in China has been carried on the comparative analysis. We construct six ordinary least square regression equations from the two aspects total scale effect and average scale effect combined with characteristics of FDI from the European Union,the United States and Japan to empirically examine the technology spillover effect differences of FDI from the European Union, the United States and Japan in China, under the premise of the use of 1988-2013 time series data of investment in China from the United States, the European Union and Japan in China and Solow residual method to calculate the total factor productivity in China. Finally, the causes of the empirical results are analyzed and relevant conclusions are given and policy Suggestions are put forward.In this article, relevant conclusions are reached through the empirical examination: 1. Foreign direct investment from the European Union, the United States in China played a positive role in China's technological progress both from total scale effect perspective and average scale effect perspective, i.e. foreign direct investment from the European Union, the United States in China has a technology spillover effect on TFP in China, and Japan's foreign direct investment in China from both the total scale effect perspective and average total scale perspective has failed to promote the technological progress of China, failing to produce technology spillover effect in China. 2. The international trade between China and the European Union, the United States and Japan respectively failed to promote technological progress in China. 3. China failed to make technological progress from foreign direct investment from other countries outside the European Union, the United States and Japan, and the technology spillover effect did not happen.According to the analysis of the empirical results and conclusions, this paper argues that FDI from developed countries can effectively bring about technology spillover effect on the total factor productivity in China and promote technological progress in China through some important ways : 1. Based on national conditions, we should strengthen the independent innovation ability. 2. Combining with the practical condition, we should introduce select foreign capital to avoid repetition and waste. 3. We should Increase investment in research and development, from the qualitative perspective to enhance China's role in global trade.