Analysis On Reverse Technology Spillover Effect Of China's OFDI And Its Influencing Factors

Since the 1990s, more and more MNCs of developed countries had practiced global layouts based on value chains, transferring the location advantages of different countries into their own competitive advantages. With the predominance on capital, technology, human resource and so on, they dominated the highest value-added strategic links, while most developing country firms are located in the low level of Global Value Chains (GVC), and become the suppliers of labor-intensive and lowest value-added products and services. Faced with the global essential transformation, enterprises from developing countries including Chinese enterprises should search for favorable locations for each value chain link. Especially for the strategic R&D links, with the difficulty of independent R&D and failure of attracting foreign investment to exchange market for technology strategy in China, Chinese enterprises need to step award and use the advanced foreign R&D factors through increasing the technology oriented OFDI in developed countries to achieve international technologies, come through the Technology barriers for industrial development and boost industrial competitiveness rapidly.Trough OFDI, domestic enterprises can reach more international leading technologies, speed up acquisition of technology, improve efficiency, enhance the autonomy and control ability. In terms of mechanism, technology sourcing FDI effect successively in three phases to improve technology:enterprises (R&D expenses sharing, imitation and following, talent flow and platform utilization mechanism), industry (retrospective, prospective and side-spread effect) and country (demonstration and competition effect). OFDI entrance mode, investors'human capital level/technology ability/R&D investment/geographical distance with technology supplier, host countries'human capital level/intellectual property right protection/R&D environment, localization, level of insertion into local value chain, local economy development as well as competition are all important influencing factors of reverse technology spillover effect of OFDI. Based on the theoretical analysis above, this thesis tested the reverse technology spillover effect empirically with econometric examination using the panel data from 2003 to 2007 through LP model and found that OFDI has robust positive effect on China's TFP, while weaker than the domestic R&D stock has. In regional aspect, by dividing the 30 provinces to the east, middle and west and testing respectively, we can see that OFDI has robust positive effect on China's TFP in all the three regions but prominent regional diversity. The reverse technology spillover effect of the east is distinctly stronger than the middle and the west, which is related to factors such as the scale of OFDI, local. absorbing capacity and so on. OFDI can produce the positive productivity reverse spillover effect only when each factor reaches the threshold level. By calculating the threshold level of the following three factors, human capital level, technology ability and local economy development, we found that rapid economic development in recent years has laid an solid foundation to the reverse technology spillover effect of OFDI while the low level of local human capital and technology ability are still the key factor that constraint the reverse spillover effect of most provinces in China. On the above basis, this thesis finally put forward some suggestions in both the micro-enterprises and macro-government policy aspects in order to make OFDI serve for Chinese economy development well.