The Influences Of Institutional Distance On The Reverse Technology Spillover Effect Of China's OFDI

With China's accession to the WTO in the 21 st century,the scale of outward foreign direct investment expanded rapidly,growing by more than double digits,and some even reached a three-digit in these years.From the structure point of view,China's investment in the seven major economies of the United States,Australia,Hong Kong,China,ASEAN,the European Union,Japan and Russia accounted for nearly 80% of China's total outward foreign direct investment in the same period,of which the direct investment in the United States has doubled and redoubled.It is not difficult to find out that China's foreign direct investment tends to flow to technologically-developed countries,such as the United States,Japan,and ASEAN countries,Russia with institutional similarities to China.Direct investment in developed countries,to a certain extent,confirms the existence of technologically-acquired OFDI.As for direct investment in ASEAN and Russia,in addition to geographical advantages,is institutional similarity a reason for China's foreign direct investment flows to these countries.Does institutional similarity affected the OFDI reverse technology spillover effect? If any,to what extent it does? These topics are focused by this paper.The impact of research institutional similarity on China's OFDI reverse technology spillovers is of great significance to China's foreign direct investment and can also provide policy guidance and support for guiding China's access to technology spillovers through OFDI.Based on the theory of transaction cost,from the perspective of absolute productivity and relative productivity,this paper uses the panel data from 2003 to 2014 of China and other more than 50 countries to analyze the influence of the three institutional distance including government governance discrepancy,financial discrepancy and openness discrepancy of China and host country empirically.The results show that the similarity of institutional similarity between China and the host country plays a different role in the reverse spillover effect.The difference of openness has the greatest influence on the reverse technology spillovers.Among them,the distance of trading freedom has a very significant negative effect on the spillover effect,and the distance of commercial freedom has a significant positive effect on the OFDI reverse technology spillover.In addition,not all institutional distances have a definite effect on the spillover effect.The influence of the financial freedom distance on the OFDI spillover effect is very insignificant.The influences of the distance of investment freedom,the distance of financial freedom and the distance of the property protection on the spillover effect are not clear.At the same time,the absolute model and the relative model suggest that the influence of China's R & D capital stock on the OFDI technology spillover is not significant.Finally,according to the empirical results,policy recommendations are put forward with China's current situation into consideration.