The Study On FDI Productivity Spillovers In Manufacturing Industries Under The Condition Of Economic Transition

As to the studies on technology spillover effects of FDI in China, most articles cite the models in foreign literatures, but the technical progress and economic growth in China have distinct features that are different from other countries. It was just the period of economic transition when China introducing foreign investment. During the past 30 years, the economic operation has two notable features:one is the evolution of institutions; the other one is that the natural resources still plays an important role in promoting the economic growth. Exactly because of the above two features, we shouldn't copy the econometric model in the similar foreign literatures to research the spillover effects of FDI in China. Neglecting the above two features will affect the accuracy of analyzing the influence of FDI on the technical progress. Therefore, it would make sense to take the influence of the two features on FDI into consideration in our research. Relying on the resource and environment is the common character of developing countries; institutional evolution is the common character of courtiers experiencing economic transition. It means that the research method and conclusion are of important significance for researching the FDI technology spillover effects in the developing countries and the countries which experiencing economic transition, both as the theoretical reference and practical guidelines.If taking the background that China underwent economic transition in to consideration, whether FDI generated technology spillover effect? If technology spillover effects do exist, how about the extent? The further question is which industries benefit from the technology spillover effect? Finally, based on the above research, we can find the answer for which industrial policies and foreign investment policies we should adopt to promote the positive technology spillover.During the process of researching these issues, this paper comply with the following methods:â‘ The principle of "one dividing into two". There is nothing that does not contain contradiction, everything in the world is multi-faced, in order to make an objective understanding of technology spillover effect of FDI, this paper not only elaborates the positive effects of FDI in promoting the technical progress of local enterprises and enhancing the economic efficiency, but also analyze the negative effects of FDI in impeding the technical progress.â‘¡Combine the particularity and generality of contradiction; Based on considering the universal laws of FDI technology spillover, this paper analyze the particular feature of economic growth in China, combining the particularity and generality, it conclude the economic model to reflect the situation of Chinese economy, and then analyze the case of FDI technology spillover in China.â‘¢Combine the theoretical analysis and empirical analysis together. Building up the basis and guideline of econometric model through theoretical analysis, this paper makes theoretical analysis based on development economics, new institutional economics and Industrial Economics, and then verify the economic theory through empirical analysis.The innovations of this paper can be described as the following three aspects:â‘ Put the influence of changes in institution and resources environment into the econometric model, we can reduce the biased error in estimating the parameter of FDI technology spillover effect, therefore this paper can explain that "Why most empirical analysis show that FDI promote the technical progress in China, while most articles in studying the situation in other countries draw the opposite conclusions".â‘¡A dedicated study of industrial features is presented on the FDI technology spillover in different manufacturing industries. Kugler (2001), Javorcik (2004), JiangJin (2008) presented opinions that the technology spillover effects are mainly generated between industries, not inside the industry. However, the existing articles didn't analyze which features of industry affect the technology spillover effect among industries; this paper gives an answer to the question.â‘¢Establish the panel data model by using statistical data of four digits to analyze FDI technology spillover effect in China; Since the classification of industry is more explicit, and the industry has better common characteristics, the conclusion is more reliable.After introducing the resources environment and institutions as variables into econometric model, we find that the FDI technology spillover effect can't pass the significance test, or FDI has negative effects on the technical progress of the local enterprises in China, this conclusion coincides with the situation of most other countries in the world. Considering the actual condition in China, this paper researches the internal connections and laws of change among the economic variables, summarizes the theories and establishes the model; it can push the research on FDI technology spillover effects becoming deeper and more profound.This paper finds that:the technology spillover effects can be enlarged by expanding the size of local enterprise, strengthening the input of R&D and reducing the capital gap between the local enterprises and foreign enterprises. Therefore, we can conclude the policy suggestions as followed:1) attach importance to investment in human capital. It is the human who invent and inherit technologies, if there aren't enough investment in human capital, it will make no sense to talk about technical progress; Through empirical analysis, we find that introducing foreign investment and human capital are restricting while promoting each other. Therefore, we should develop education for human capital.2) Increase R&D investment. Just importing the advanced instruments and equipments, processing methods, such behaviors of copying the foreign enterprises can't help realize the sustainable technical progress. Only increasing independent R&D, enhancing the level of absorbing technology and the standard of R&D, the technology spillover effects can be more obvious.3) In terms of the industrial features, we should promote scale economy in the enterprise, and increase the amount of capital in the individual enterprise.The empirical analysis shows that:the two factors are critical for generating FDI technology spillover effects, with larger of scale economy of the enterprise and more human capital, there will be more obvious spillover effects. Therefore, on one hand, encourage the enterprises which have competitive advantages to grow stronger through various ways such as tax adjustment, financial support. On the other hand, the local government should encourage merger and acquisition of enterprises through fair market competition; guide the sources flowing to the effective enterprise, provide conditions for enterprises to imitate and absorb advanced technologies.