FDI Technology Spillover And Regional Innovation Capacity

The inflow of FDI can fill the "double gap" in the development of the host country,providing developing countries with capital and equipment,while also bringing advanced technology and management experience,the latter being the "technology spillover effect" of FDI.In the early years of reform and opening up,foreign investment flowed mainly into labour-intensive industries with low technology content in China,which had a limited impact on China’s innovation,but the technology spillover effect of FDI has changed with the improvement of China’s independent innovation capacity and the construction of innovation networks.The enhancement of innovation network linkages can enable closer exchanges among regional innovation agents,thus forming complementary resource advantages and benign competitive relationships,which can help the construction of regional innovation systems and also help China better absorb technology spillovers brought by foreign investment.The article aims to verify the impact of FDI technology spillover on China’s regional innovation capacity,as well as to verify whether innovation network linkages play a moderating role on FDI technology spillover.This moderating effect may have a threshold effect,affecting the original linear relationship between FDI and regional innovation capacity.This paper conducts an empirical study using panel data of 30 provinces(cities)in China from 2007-2018.The test finds that FDI plays a positive spillover effect on China’s regional innovation capacity.At the same time,the closer the links among the subjects in the innovation network,the better the FDI spillover effect.There is a double threshold effect in the regulation of innovation network linkages,the strength of the linkages among the innovation agents in a region must exceed a certain level for the effect of FDI technology spillover to exist,after which the spillover effect increases with the closeness of the network linkages.In addition,this paper conducts an extended study of heterogeneous FDI technology spillover,dividing FDI into hightechnology FDI and medium-low technology FDI according to the technology level of the FDI inflowing industries,and the results show that the threshold effect of innovation network linkage also differs in the role of FDI spillover at different technology levels.