Statistical Analysis On China Technology Development Effects Through Foreign Direct Investment

Foreign Direct Investment (FDI) is an important channel for most developing countries to utilize advanced technology to realize long-run growth, because packaged technology can be transferred through FDI.From 1980s, China has made policies to attract FDI, and now the amount of FDI utilized by China is the most among developing countries. From 1990s, the technology spillover effects have been a hot issue in China. Technology spillovers were really there? What impacted the effects? What can the government do to facilitate the effects? The answers of these questions are important for a country to make correct policies for FDI.The thesis begins with the definition of FDI, technology transfer, and spillover effects. Then the process of transnational technology transfer was analyzed, followed by analysis of spillover mechanism of FDI in host countries. In the last part of Chapter 2, the development of technology fell into three phases by R&D intensity, and FDI has different effects in different phases.In the following chapters, cointegration analysis and Granger test was made by using FDI deposit and R&D intensity. The results are as follows, FDI has long-term equilibrium relation with the technology level; when the FDI increases 1%, the R&D intensity will increases 0.1388%; when the lag length is 2-4, FDI is the Granger cause of R&D intensity; but R&D intensity isn't the Granger cause of FDI not matter in the short or in the long term, FDI inflow has limited effect in technology spillover. In the last chapter, by analyzing the restrict factor of technology transfer, the thesis provides suggestion of correct policies for FDI.