Technology Spillover Effect Of Direct Investment From Taiwan Businessman

At the beginning of reform and opening in Chinese mainland,numerous government programs were introduced to speed up the economy development.For instance,providing tax incentives,taking advantage of the cheap raw materials and labor force to attract foreign enterprise to establish plants in mainland,in order to not only create jobs for local residents by direct investment from foreign enterprise,but also achieve the target of prompting economy growth and industry upgrading.With the frequent cross-strait exchange in recent years,the cross-strait economy and trade,industry cooperation and technology exchange are increasing day by day.As the lack of natural resources,the production raw materials and semi-products are mainly imported from foreign countries in Taiwan.The costly raw material and labor force result in the high production costs.Therefore,the manufacturing enterprises from Taiwan mostly set up the plants in the areas which own geographic proximity and low costs,such as Chinese mainland,Vietnam,Malaysia and Thailand.Because of the cross-strait's similar culture,language and the geopolitical factors,mainland possesses 61%of Taiwanese businessmen,which is the highest percentage in global view and nearly triples the amount in Singapore Jiangsu province is the main area which attracts investment from Taiwan in mainland.Compared with other provinces,it owns the highest proportion,the maximum investment,and the largest amount in manufacturing direct investment.This article combines the quantitative analysis with qualitative analysis to investigate whether the direct investment of manufacturing in Jiangsu province would lead to the technology spillover effect.Firstly,Based on the previous studies and theoretical explanation,this article elaborates the influence to local manufacturing technology from the foreign direct investment in manufacturing and discourses the Taiwanese direct investment course,industry scale and current investment status in Jiangsu province.Secondly,this article takes the gross industrial production,employment,total assets and Taiwanese direct investment amount as variables to apply the stationary test and cointegration analysis.Further more,this article sets up a-model to probe the the technology spillover effect of direct investment from Taiwan businessman based on the classical production function model,which draws the conclusion as follows:1,Although the highest amount and largest direct investment in manufacturing are possessed by Jiangsu province,there is no technology spillover effect in manufacturing of Jiangsu province.2,The direct investment enterprises of Jiangsu province are classified as low-tech category even if those appertain to high-tech industry.The industrial investment scale of high-tech industry is restricted.3,Due to the excessive industry restriction and the continuous technology improvement of local enterprises in Jiangsu province,the competitiveness of Taiwanese enterprises will face acid test if technology level and investment scale were not be increased moderately by the government of Taiwan.In view of the conclusions,this article not only proposes the vision of common development between Taiwan and Jiangsu province,but also puts forward the policy recommendations for enhancing the cross-strait economy effect.Including reducing the technology restriction,improving the technical content of Taiwanese enterprise,making the invest environment better in Jiangsu province and giving suggestion to introduced Taiwanese technical personnel in connection with the differences in the employment environment.