Market Competition Structure,Technology Gap And FDI Spillover Effects

Market competition structure and technology gap significantly influence FDI spillover effects.In this paper,theoretical analysis,model construction and econometric verification are used to study the impact of market competition structure and technology gap on FDI spillover effects.Theoretical analysis is based on FDI theory and Industry Organization theory and analyzes the interaction of market structure,technology gap and FDI spillover effects in the frame of SCP,meanwhile,combine with FDI spillover literature in both theoretical and empirical study to build the theoretical basis for subsequent model building.The basic assumption of model construction is extended to establish the double Cournot competition frame in which and spillover effects of FDI is analyzed with flow in both final products market and intermediate products market.The empirical study uses panel data of American manufacturing and Chinese manufacturing segment industry,with regression analysis carried out on the measurement groups of different market competition structures divided according to different concentration ratio.This paper is divided into seven chapters.The first chapter is the introduction.This chapter firstly puts forward the problems and gives the brief reviews for theoretical and empirical research of FDI spillover effects,then describes the meaning of this research,and points out the innovation and shortcomings in this paper.Finally,introduces the structure of the paper,the technical route and the main research methods and data sources.The second chapter is the theory basis and related literature review.In thischapter,the relevant theories of FDI,FDI spillover,technology gap and market competition structure are reviewed,and they are put into the SCP framework of industrial organization theory for interaction analysis.For the theoretical literature review,this chapter mainly focuses on the analysis of assumptions or implied assumptions behind theoretical model and their impact on the conclusions of the model,as a breakthrough point to extend assumptions of theoretical model.Empirical literature is reviewed on the existence and influence factors of FDI spillover effects,from the intra industry spillover effects to the inter industry spillover effects and discuss consensus and controversy of the main empirical literature research.Finally this paper points out that most of the empirical literature is analyzed from the all sort or kinds of industries,while few studies was focused on specific industry,with the influence factors further analyzed,such as industry's market structure,technical characteristics and the supply chain.Therefore,it is practical significant to combine with the specific characteristics of the industry to discuss the spillover effects of FDI.The third chapter is to build a theoretical model.The model extends a key assumption in the existing literature--FDI only flows into the final product market,and purchases intermediate products from local suppliers,and put FDI entry into the bilateral market into the framework of Cournot competition to analyze the impact of FDI entry on the host country enterprise output and profits,and the influence degree of market competition and technology gap on the spillover effects of FDI,from closed economy to open economy.It comes to a conclusion that when FDI only enters the final product market,the market output will be increased and there is backward linkages for local suppliers,with positive relation with technology gap;when FDI enters intermediate product market of the host country at the same time,the upstream FDI will have a crowding out effects on local suppliers,the lager technology gap is,the more obvious the crowding out effects is.However,the upstream FDI have significant forward effects to native producer,to expand the total output of intermediate products and reduce the equilibrium price,which directly reduces the marginal cost of downstream local producers.The fourth chapter is the empirical analysis of the FDI spillover effects of the 17 segments of the manufacturing industry in the United States.This chapter first introduces the North American industry classification system(NAICS),and analyzes the trend of FDI in 17 manufacturing segments from 2002 to 2014,then calculates the increased value per capita of domestic enterprises and multinational companies to determine the technology gap,and then use the Bain classification to divide the 17 sub sectors according to industry concentration into moderate oligopoly,low oligopoly and monopolistic competition groups,and make empirical study separately.The study finds that there is a small positive backward spillover effects of FDI on the whole manufacturing,which is different in three different market competition structures.In the moderate oligopoly market,FDI entry has a significant negative effects and not significant crowding out effects.As for the low oligopoly market and monopolistic competitive market,FDI has a significant positive backward effect on the other two groups.There was no lag effect of FDI spillover effects for the three groups study.These conclusions validate the theoretical model from an empirical point of view.The fifth chapter is the empirical analysis of the FDI spillover effects of the 26 segments of the manufacturing industry in the China.This chapter first calculates the output per capita of domestic enterprises and multinational companies in the 26 sub sectors,to determine the technology gap degree,and then use the Bain classification,to divide the 26 sub sectors according to industry concentration into low oligopoly,monopolistic competition,competition groups respectively for quantitative analysis,and compares the result with ones of United States.From the perspective of market competition structure,the degree of monopoly of the manufacturing sector in the United States is higher than that of China's manufacturing industry,which results in a very significant negative backward spillover in the moderate oligopoly market.From the view of technology gap,multinational companies in the United States compared to local enterprises,technical level is similar,so there is no delay for the backward spillover effects,and because the technical level of the China lagged behind,there issignificant delay for the backward spillover effects.The sixth chapter is the case analysis.The empirical study for FDI spillover effects on China auto parts industry is made using the panel data of China from 1998 to 2014,and to verify the influence of market competition structure,technology gap and FDI entry mode.The study finds that the backward spillover effects of the joint venture FDI into the automotive market is positive for the local auto parts industry,but the positive spillover effects is lagged.Meanwhile,the backward spillover effects of greenfield FDI is not obvious.There is positive FDI spillovers effects on domestic auto parts industry at the early stage of FDI entry in the form of joint FDI or greenfield FDI.However,in the later,FDI spillover effects of joint ventures gradually expanded,and the one of greenfield FDI is gradually weakened to be not significant.Generally speaking,the backward linkage effects of FDI on the local auto parts enterprises is obviously lagging behind,which is related to the technology gap.The seventh chapter is the study conclusion,study limitations and suggestions.