Study On IFDI Ownership Structure And Technology Spillover Effect Of China's Auto Industry

The rapid development of FDI has become a hot topic in the modern world economy, especially in automobile industry. On the one hand, The establishment of the joint venture brought new opportunity for the foreign capital investment. On the other hand, the automobile rely on multinational enterprises due to lacking of core technology and independent innovation ability, leading to slow development of independent brands. Therefore, the relationship between ownership structure and technology spillover has an effect on China's auto industry, even the status of auto industry in global production and sales.This paper establish an economic theory model, building a game bewteen a foreign enterprises with superiority technology with two local enterprise. The paper analyzing the process that FDI set up the joint venture with local enterprise by technology investment, and competing with domestic enterprises. The study found that the relationship of ownership and technology investment is influenced by the degree of technology spillovers when China has main control : within a certain scope of technology spillover, both have positive correlation, if not, both have negative correlation.When the China and foreign ownership share value is 0.5, domestic independent enterprise has an negative correlation with technology investment, and the output of joint ventures is positive. However, the output of joint venture's local part is increasing when the degree of technology spillover is large. Thus, it is particularly important for independent brands to adopt reasonable ownership. Finally, from the perspective of the social welfare, joint venture's production depends on the degree of technology spillover, but not on the basis of the host country's welfare in spite of the existence of technology investment.