Research On China's OFDI,Space Spillover And Regional Innovation Capability

Since the year of 2003,China's outward foreign direct investment has grown in size.Outward foreign direct investment will bring the effect of technological upgrading,innovation capability improving and industrial structure upgrading for investment sites.This effect is also called reverse technology spillover effect.With the gradual improvement of infrastructure such as the internet and transportation,the relationship between the regions is getting closer.Therefore,the reverse technology spillover effect brought by OFDI will not only stay at the investment location because of the administrative divisional restrictions existing between the regions.It will affect technical level,innovation capability and industrial structure of other regions through channels such as trade linkage,population mobility and technology diffusion.This is consistent with the view of the spatial spillover effect mentioned in the new geoeconomics.Therefore,at the critical moment of China's current economic transformation,how to enhance China's independent innovation capability through outward foreign direct investment,how to coordinate regional development through the spatial spillover effect of outward foreign direct investment,and how to promote the transmission and absorption of spatial spillover effect are the important problems of China's current situation.Therefore,this paper innovatively considers the spillover effect among regions as the supplementary conditions,and studies the following three key questions:(1)Does the spatial spillover effect of outward foreign direct investment in the inter-provincial zone affect regional innovation capability?(2)Does the spatial spillover effect between regions due to outward foreign direct investment affect the capability to innovate?(3)How do the spatial spillover effect due to outward foreign direct investment transfer between regions?Using China's 2003-2015 inter-provincial level data,this paper firstly uses the spatial econometric model to study the existence of spatial spillover effect of outward foreign direct investment between regions.Then,based on the GDP spillover model,the transmission channels of spatial spillover effect are furtherly analyzed.The results show that:(1)Outward foreign direct investment will not only positively affect the innovation capability of the investment site,but also promote the innovation capability of other regions;(2)The spatial spillover effect caused by outward foreign direct investment between regions will affect the capability to innovate of other regions,but the extent of impact is affected by the degree of regional development;(3)Trade relation,population movement,and technology diffusion between regions have an impact on the transmission and absorption of spatial spillover effect,but the degree of impact will also be affected by the level of regional development.On the one hand,the research of this paper expands the research framework of outward foreign direct investment from the spatial level;On the other hand,through empirical research,it specifically explores the impact of the transmission channels such as trade association,population flow and technology diffusion on the acquisition and absorption of spatial spillover effect.This paper break through the empirical limitations of spatial spillover transmission channels.In addition,the research in this paper also has important practical significance for the formulation of central and local strategies of outward foreign direct investment and regional coordinated development.