The Analysis Of The Spillover Effect Of Foreign Direct Investment In China

China has come to be one of the top countries FDI flows into after taking opening policy for more than 20 years.The main purpose of china's opening policy is to promote the economy growth and technology progress through the FDI spillover effect. Based on both theoretical and empirical analysis methods, the paper attempts to research the FDI spillover effect on china's productivity and innovation capability.Firstly,the paper studies the mechanism of FDI spillover. Then the paper lays emphasis on the empirical study to estimate the impact of FDI spillover on the productivity and innovation ability.The empirical study on the productivity mainly includes three parts. In the fisrt part, The paper takes a statistical research to find if and how much the FDI prompts the productivity of the industry when we take all the sectors of industrial section as a whole.Then at the second part we set 12 periods and respectively estimate the impact of the spillover from FDI on the productivity of industry.In the third part, a statistical research was made using sectional date to estimate the impact of FDI spillover to different two-bit industrial sectors. The results indicate that the FDI spillover is obvious when the paper take all the sectors of industrial section as a whole. But the results indicate that the FDI spillovers begin to be positive, and then gradually decline to be negative when the paper set 12 periods and respectively estimate. When the paper classify 33 two-bit industrial sectors into 11 groups and respectively estimate the impact of FDI spillover to every group, we found that the FDI spillovers defere from every sector and it seems that the FDI spillovesr are more positive in the labor-massed sectors and more negative in the capital-massed and technology-massed sectors. At last, through empirical analysis of influence factors of FDI spillovers we find that the proportion of FDI, Herfindahl and industrial characters are the main influence factors of FDI spillovers.This paper also does a pilot study about the spillover effects of FDI on innovation capability in China. We find positive effects of FDI on the number of domestic patent applications in China. But the spillover effect is stronger for minor innovation such as external design patent, and weaker for vital innovation such as invention patent applications.At last, the paper puts forward the views that some measures must been taken to deepen FDI spillover. Laws against monopolization should be perfected; embedded development mode should be taken at present stage to further linkages; enhance the nation's absorptive capability of technology.