Study On Effect Of Reverse Knowledge Spillover Of Chinese Enterprises’ Outward FDI

Since the 1990s, the investment of the enterprises in developing countries has expanded rapidly in the developed countries. Traditional international direct investment theory is difficult to explain FDI of enterprises with the lack of monopoly advantage. Therefore, foreign scholars introduced a new concept "knowledge-seeking FDI", which is different from the traditional foreign direct investment in motives, condition, location and industry choice. As a developing country, China’s technical foundation is weak, the core technology of industry has still not breakthrough. Therefore, it is important of Chinese enterprises to implement knowledge-seeking FDI in order to narrow the gap between the world advanced level and China, achieve strategy of technology catching-up, and enhance the competition capability in international market. However, the proportion of Chinese enterprises’investment in developed countries is small, industrial distribution of investment is not reasonable, and advanced knowledge from outside is not fully absorbed. Therefore, how to reasonably use technological resources in developed countries to increase innovation performance has become the focus of policymakers in enterprises and government. In the study of relationship between outward foreign investment and innovation performance, the paper focuses on key role of reverse knowledge spillovers mechanism, and tries to analyze differences of reverse knowledge spillovers realization of multinational enterprise. Because motives of Chinese enterprises to invest in developed countries is knowledge-seeking,the analyzing units are Chinese enterprises who have invested in the developed countries. At the same time, according to the related theory, the paper puts forword a conceptual model including reverse knowledge spillovers, mechanism, absorptive capacity and innovation performance.The mechanisms of investment of Chinese enterprises in developed countries affecting innovation performance include R&D cost sharing mechanism and reverse knowledge spillover mechanism. At the same time, the process of reverse knowledge spillovers can also be divided into three stages:at the first stage, the external knowledge transfers from the organizations in the host countries to overseas subsidiaries, which means acquisition and assimilation of external knowledge; at the second stage, the external knowledge transfers from the overseas subsidiaries to the parent company and other overseas subsidiaries, which means transformation and utilization of acquired knowledge; at third stage, knowledge transfers from the parent company to the other domestic enterprises, and knowledge spillover occurs mainly in the country and industrial level. There are different mechanisms of reverse knowledge spillover to play a leading role at every stage. Absorptive capability of enterprise has a important influence on realization of reverse knowledge spillover mechanism and innovation performance,and is the focus of the paper too. Knowledge acquisition in host country is not only beneficial to innovation performance of multinational enterprises, but also to play a positive role in promoting the Chinese enterprise’s overall performance. At the first and second stage, absorptive capacity of China’s multinationals Including human capital, R & D capital, social capital and organizational capital has played a key role in absorption and utilization of reverse knowledge spillover. At the third stage, knowledge spillovers occurs mainly at the national and industry level. Therefore, absorptive capacity of the region such as R & D investment, the human capital stock, the development of information infrastructure and financial services in China has played an important role in realization of knowledge spillover. This paper uses 1998-2007 macroeconomic data of 23 countries to test absorptive capacity of the region. The results show that R & D investment and human capital stock is not enough to absorb and utilize reverse knowledge spillover,but development of financial services can promote absorption of reverse knowledge spillover and improve innovation performance. This paper compares and analyzes the relationship among knowledge absorptive capacity external knowledge acquisition and innovation performance using the cases of Wanxiang, Lenovo and TCL.The paper uses questionnaire to survey the microscopic mechanism based on analysis of cases. In the process of empirical testing, the paper conducts a questionnaire survey to study 137 Chinese MNCs, and utilizes regression method to analyze the results by using SPSS 17.0 software.The results show that:reverse knowledge spillover has not a significantly direct impact on innovation performance; absorptive capacity not only directly contributes to improving innovation performance, but also develops a positive moderating mechanism as reverse knowledge spillover affects innovation performance. R&D capital and social capital play a positive moderating role as reverse explicit knowledge spillover affects innovation performance, and social capital and human capital play a positive moderating roleas reverse tacit knowledge spillover affects innovation performance; Firm size has not a significant impact on innovation performance.At last, the paper puts forward some policy suggestions:actively guiding investment of key industries in developed countries; increasing total R&D stock; optimizing human capital structure; establishing a long-term contact with enterprises in host countries;actively improving innovation of organizational mechanisms and creating open corporate culture.