The Impact Of Cultural Distance On Reverse Technology Spillovers Of OFDI Companies In China

With the tendency of increasing number of Chinese enterprises going out to the world,direct investment abroad becomes an important impetus of supply-side structural reform under the situation of the new normal of Chinese economy development,and is also an important way to obtain the opportunities of international financial cooperation and to push the adjustment of structure of industries with the help of global market and resources.In order to achieve 19th CPC National Congress's goal of " making China an advanced country in comprehensive national strength and international influence".the acquisition of advanced technology and elitist from direct investment abroad is indispensable for Chinese enterprises to improve innovation ability of domestic enterprises.China is becoming an main driving force in FDI(Foreign Direct Investment)which facing the change from getting resources to acquiring advanced technology,driven by the strategy of "Going out" and "The Belt and Road Initiative".Reverse technology spillover has an important role in improvement of upgrading of industry structure and technology.The effect of direct investment abroad on promoting technology of investing country which is accompanied with expansion of amount of foreign direct investment attracts increasing attention of specialists.The amount of Chinese DFI has showed an ascending tendency as same as the amount of Chinese OFDI enterprises and industries involved since China became a melber of WTO.According to "2017 Statistical Bulletin of China's Outward Foreign Direct Investment",Chinese DFI of 158.29 billion of US dollars is the 3rd largest amount throughout the world and the stock of Chinese DFI is 1809.04 billion of US dollars which is the 2nd largest in the world.Most specialists testified the existence of reverse technology spillover resulted from OFDI in previous research.What factors influence the effect on the process of China getting the reverse technology spillover?The differences between investing country and invested country attracted the attention of experts in recent years.This paper tries to talk about whether the cultural gap which is the fundamental factor among countries will influence the reverse technology spillover or not.Firstly,on the basis of summarizing the relevant literature at home and abroad,this paper studies the mechanism of reverse technology spillover and the influence mechanism of cultural distance on reverse technology spillover.Secondly,based on the matching data between the database of China's industrial enterprises from 2005 to 2007 and the list of foreign investment enterprises of the Ministry of Commerce,the total factor productivity of Chinese OFDI enterprises is calculated by using the LP method as the proxy variable to measure the technology spillover.And then use the metrics of Dow and Karunaratna development on the basis of the index of language difference,this paper constructs an effective index system to measure the language distance between countries by using the weighted method of national population proportion as the variable to measure the cultural difference,and finally,through the empirical research.Examine the impact of cultural distance on OFDI reverse technology spillover.The empirical results show that:cultural differences hinder reverse technology spillover,and cultural differences have different effects on reverse technology spillovers of OFDI enterprises with different investment motives.Cultural differences have a more significant impact on reverse technology spillover of technology seeking enterprises.These conclusions have certain reference significance for enterprises to carry on the effective foreign direct investment and the government to formulate the foreign investment policy.