Research On The Influence Of FDI's Quality On Regional Innovation Capability In China

With the accelerating of economic globalization and the deepening of the international division of labor,international capital flows have continued to grow among countries.Advantages in terms of labor force,market potential,social environment and FDI's policies attract foreign direct investment from all over the world inflow to China,and China has gradually become the largest developing country in attracting FDI in the world.A large number of facts have proven that FDI as an important international capital carrier has played an important role in the process of China's economic reforms.Scholars have paid extensive attention to the impact of FDI on China's regional innovation capability,but they have not abtain a unanimous conclusion.What is noteworthy is that most of the research on the impact of FDI on regional innovation capability is usually based on the assumption of homogeneity of FDI,and made direct examinations of the relationship between ‘quantitative' FDI and regional innovation capabilities.As a result,the functions of the quality features of FDI and the technological absorptive capability of host country may be weakened or even ignored.However,whether there exist differences in the effect of FDI with different characteristics such as source countries,technology level or industrial flow on the regional innovation capability in China? Does China's absorption of FDI spillovers also affect the improvement of regional innovation capability?In order to explain the above issues better,this paper places the research perspective on FDI heterogeneity,and based on the theory of endogenous growth and technology spillover,etc.,and refers to the theoretical models constructed by Borensztein et al.,and brings the parameterized FDI's quality into production function,and analyzes the mechanism of the impact of FDI's quality on regional innovation capabilities.On this basis,the five characteristic indicators of project scale,technical level,high-tech industry distribution,exportation pulling degree,and output value profitability were selected to measure FDI's quality,and constructed a regional innovation capability evaluation index system that includes 13 indicators under the innovation environment,innovation input,and innovation output.Then using the panel data of 30 provinces in China from 1998 to 2016,and adoptting the fixed effects model and the panel threshold model to empirical analyze the impact of FDI's quality on regional innovation capability of China.After that giving targeted policy recommendations based on regression estimation results.It can be seen from the linear regression results of ordinary panel that in general the promotion of FDI's quality contributes to the improvement of regional innovation capability of China.However,there are regional differences in the effect of FDI's quality on regional innovation capability under different characteristic indexes.Specifically,in terms of scale,technical and high-tech industrial FDI's quality significantly promotes regional innovation capabilities across the country and regions.The FDI's quality measured by exportation pulling degree plays an important role in enhancing regional innovation capability whether it's across the country or the Midwest,while it shows a significant negative effect in the eastern region.Measuring the FDI's quality by profitability showed a significant role in promoting regional innovation capability only in the eastern region,but the regression results were not significant across the country or the Midwest.Under the non-linear influence mechanism,comprehensively measured the characteristic indicators of FDI's quality,and took the level of human capital as the threshold for absorbing capacity of the host country.The double threshold regression results show that with the enhancement of the level of human capital,the improvement of FDI's quality will obviously promote the regional innovation capability.At the end of the article,we provide some pertinent policy recommendations,such as giving priority to the introduction of high technology content FDI,strengthening the distribution guidance of FDI industrial flow and increasing the investment in education.