Research On FDI And China's Enterprise Technological Ability Improving

The developing country devotes herself to attract more FDI, which can bring the advanced technology and its spillovers. Since 1978, our country has become very popular among those developed countries and regions. The real amount of FDI has been keeping a steady growth. The joint venture is one of the most important channels of introducing the new technology to China and becomes a part of China's economy.Technology Transfer (TT) by FDI identifies itself by combining the transfer of technology and ability together from the low level to high level gradually. In the past, the multinational company (MNC) sets its home country as the center of R & D, and then transfers the technological result by FDI. As the level of TT enhances, a sound technological environment and ability of local enterprises take great significance in a successful transferring process. After we entered into the WTO, some of the market barrier of entering has been canceled and the intellectual property right (IPR) protection policy has strengthened, so that MNC starts to establish R & D center in our country, which is a symbol of transferring technology abilities.The micro-mechanism of spillovers of FDI is the market competition, which obliges MNC to transfer more advanced technology. However technology is a special commodity, which induce spillovers inevitably. At the same time, the local enterprise has to study or imitate the practice of MNC to improve the product efficiency and technology innovation constantly. Middle-mechanisms of spillovers of FDI is the linkages between companies, which can also apply to an industry level. During the process of competition between local companies and foreign companies, cooperation is necessary, which makes the spillover possible. When the technological linkage between those companies concentrate into a fixed region, the linkage effect expands into a kind of spatial agglomeration effect. The competitive advantage of foreign capital depend on the human resource (HR) heavily because the capital equipment can't absorb all of the knowledge about it In the end, Ihe spillovers effect works by training the employees and their mobility.MNC need to control the diffusion of its core advantages, otherwise it will loose in the market. The crowd-out effect is the other side of FDI, for the monopoly of technology. But this effect can't weaken the FDI making the knowledge increasing and accumulating in the host...