Research The Effect Of The FDI To The Technical Innovation Of Shandong Province

Since the reform and opening up, Foreign direct investment (FDI) has been an important factor in supporting China's economic growth. Inflows of FDI not only brought China lots of capital and technology, but also promoted the upgrading of the industrial structure and technology innovation through the technology spillover effect in China.Technological innovation is the engine to promote economic growth, it can stimulate the country's long-term sustainable economic development absolutely.Therefore, developing countries wish to bring their domestic enterprises corresponding capital and technical input by the technical spillover effect of FDI, and then enhance the independent innovation capability of enterprises. For Shandong province ,it has been the third province on the amount of attracting foreign investment in 2005. In 2015, the Party Center Committee put forward to reform from the supply side, improve the environment of the supply side, optimize the supply-side mechanism, enhance the vitality of the micro-economy subject greatly and enhance the fresh impetus in long-term stable development of China's economy by reforming the system supply. Therefore, it's well worth doing some empirical researches that how to improve the local technological innovation ability by using the technological spillover function to FDI from labor,institutional creation and infrastructure construction in the context of supply side reform currently.This paper built an Multiple Linear function with the variables of human capital,labor, infrastructure construction, economic structure, economic development level, FDI and capital starting from the current situation of FDI and technological innovation based on the theory of Cobb-Douglas function. By using Unit Root Test, Cointegration Test and Granger Causality Test, it's found that the FDI has a positive effect on the technological innovation in Shandong province. Moreover, by exploiting Panel Data Model and analyzing the effect on technological innovation played by each factor using the connected spillover effect of FDI, we raised that how to promote local technological innovation, improve abilities of independent innovation and promote the economic growth in the new situation.This paper made these conclusions by empirical analysis: first, FDI has a positive effect on the local technological innovation; second, economic development level,infrastructure construction and labor has a positive effect on spillover effect of FDI; last,economic structure has no positive effect on spillover effect of FDI.In summary, according to the empirical research results, it put forward that how to optimize the allocation of resources and lead rational use of FDI on the angle of supply side. This will enhance the improvement of the local human capital and absorb the technological spillover effect to improve the abilities of independent innovation and promote the level of economic development.Therefore, this paper made these following suggestions starting from these factors that supply-side labor, capital and the institutional creation based on the actual situation in Shandong province.In particular, the main contents of the paper include next parts: 1. improve the investment environment and realize the innovation system; 2. emphasis on human capital and promote technological innovation; 3. adjust the flow of foreign investment and optimize industrial structure.