Research On Regional Absorptive Capacity For FDI In China

In recent years, with the development of economic globalization, international direct investment increase rapidly and subsidiaries of multinational companies widespread distribute. The vast majority of multinational companies have advanced knowledge and technology, they realize their own profit maximization at the same time, the host country's technological progress and economic development has an important impact. Therefore, the use of multinational companies advanced technology, management experience to promote national technological progress and economic growth of developing countries to attract FDI has become an important objective of the inflow, the spillover effects of FDI on international economics has become an important research topic. FDI can bring in technology spillover, and there is no uniform conclusions. The reason, the host country's absorptive capacity of the spillover effects of FDI is very important, this paper is to study the impact of absorptive capacity on the quality of economic growth and its threshold effect.First, a conceptual model of regional absorptive capacity for FDI is set up based on the all kinds of absorptive capacity theory and focusing on reform and open policy in China. Second, refer to the new growth theory, the results will be based on the absorptive capacity of intermediate inputs into the expansion of the species category endogenous growth model, depicts the absorptive capacity, the technological gap with the steady economic growth between the inherent mechanism. The establishment of the measurement model between regional absorptive capacity and the quality of economic growth, which gradually promote the multi-level empirical studies and interpretation of the main variables to consider endogenous re-examination of the issue. Third, FDI to China's eastern region and central-western regions of the positive effects of economic growth, there was a significant difference between the empirical research as well as on FDI absorptive capacity of the threshold effect of the analysis and measurement. Finally, on China's FDI absorptive capacity in the internal structure of a typical area and the type of analysis, drawing the corresponding conclusions and policy implications.The results shows that regional absorptive capacity for FDI is composed of technological capability, institutional capability and the interactive comprehensive indexes, which fully reflect regional absorptive capacity for FDI. Furthermore, the differences among regional absorptive capacity for FDI from the perspective of time and panel data demonstrate the importance of absorptive capacity for FDI evaluation, which also proves the correct selection of measurement indexes.The results show that through the demonstration of R&D and human capital, technological capability indicator, institutional capability indicator and absorptive capacity indicators, absorptive capacity for FDI obviously positive influences regional TFP development. It also tests the relationship between absorptive capacity for FDI and economic development quality from the point of formal econometric analysis.This paper indicates that the absorptive capacity for FDI is endogenous, therefore in order to estimate the impact of it on economic performance, we need a source of exogenous variance in the absorptive capacity for FDI. In this paper, we look for instrumental variables through different perspectives of geography, history and resource endowments, which are more probably exogenous. Through the method of instrumental variables, which is Two-Stage Least Square concluding instrumental variables, the argument that the absorptive capacity for FDI promotes economic growth becomes more robust.This study shows that FDI contribute directly to economic growth in the eastern region and central and western regions no significant difference; FDI indirect effects and overall contribution to the eastern region was significantly larger than the central and western regions. The subsequent empirical testing on FDI absorptive capacity factors further confirmed the existence of threshold characteristics. The results show that FDI absorption is positively correlated with the local technical capacity, institutional capacity. After these indicators have reached or exceeded a certain level, technology spillover will show a significant leap.This paper in 2005 on China's 31 provinces FDI absorptive capacity of the internal structure on the basis of regional FDI absorptive capacity will be divided into the attraction of capacity-oriented, the use of capacity-oriented and innovative capacity-oriented three categories.