Institutional Environment And OFDI Reverse Technology Spillover Effect

In recent years,along with the promotion of the“going out”strategy and the rapid development of the "One Belt,One Road" strategy,the amount of M&A and greenfield investment of domestic multinational corporations has continuously increased,and Chin’s outward foreign direct investment(OFDI)activities have become the focus of academic circles.In an open environment,the improvement of a country’s technological level is not only affected by domestic R&D investment,but also by the R&D spillovers of other countries.The technology spillover of the host country has become the main motivationa for multinational transnational company’s OFDI.Based on the domestic and foreign relevant literatures of OFDI,this paper uses the L-P model to study the relationship between the institutional environment of the home country and the reverse technology spillover of OFDI based on the provincial panel data of China’s OFDI from 2003 to 2015,respectively from the marketization process,legalization level of each region,intellectual property protection,the relationship between the government and the market,testing it’s impact on OFDI reverse technology spillovers.Taking into account the differences in the institutional environment of various provinces and cities,the degree of influence of the institutional environment on the reverse technology spillover of OFDI is compared between the three regions of East,Central and West.In addition,given the impact of differences in host country economies on the estimation results,host countries are classified into developed economies,emerging economies,and developing countriesThe results show:The institutional environment can significantly promote the reverse technology spillover of OFDI.The foreign R&D capitalacquired through OFDI needs to be combined with the domestic perfect institutional environment to promote technological progress.The marketization process and the continuous improvement of the level of legal have positively promoted the absorption of OFDI reverse technology.A good relationship between the government and the market will help the absorption of OFDI reverse technology spillovers of multinational corporations.The government’s protection of intellectual property rights has not played a significant role in the absorption of technology spillovers acquired through OFDI.Due to the imbalance of institutional environment in various provinces,the OFDI reverse technology spillover presents significant regional differences.The superior environment of the eastern provinces has significantly increased the absorption of OFDI reverse technology spillovers in the region.The continuous improvement of the business environment in the western provinces has had a positive impact on the technology spillovers acquired through OFDI.The institutional environment in the central provinces has not significantly improved the absorption of reverse technology spillovers.The OFDI flowing to developed countries,emerging economies and developing countries has played a significant role in domestic technological upgrading after being adjusted by the domestic institutional environment.The high technological proximity and relatively loose investment environment make OFDI flow to emerging economies greatly promote domestic technological progress.The OFDI to developing countries will pronote domestic technological progress through mechanisms such as R&D cost sharing.After the interaction between OFDI and institutional environment variables in developed economies,there are strict restrictions on technology transfer in developed economies and a large gap in technology,and the effect on domestic technology is slightly less than that for emerging economies and developing countriesIn the context of slowing domestic demand,sufficient foreign exchange reserves,escalating trade frictions and rising tides of counter-globalization,it is necessary to guide domestic enterprises to actively "going out" through policies and funds,vigorously carry out OFDI,which is to bypass the host country trade barriers,and find new paths to promote domestic economic development and technological upgrading.