China's Foreign Direct Investment And Technological Progress Between Theory And Empirical Research

Science and technology are the driving force in economic development. What the developing countries gets is the standardized, mature technology through traditional direct foreign investment, which is no longer fit the needs of economic development step by step. At present, OFDI as an international access to the advanced technology gets more and more attention. So, if OFDI can promote technological progress, and the relationship between OFDI and technological progress, are the very important practical problems for the developing countries.This paper analyses the OFDI and the technological progress from both theoretical and empirical ways. In the theoretical analysis, firstly, based on the technology gap theory,the investment development cycle theory and the technological innovation and industrial upgrading theory, we analyze the relationship of foreign direct investment and technological progress. Secondly we structure the analytical framework of OFDI and technological progress, and analyze four motive-different OFDI to technological progress. Finally based on the OFDI and technological progress analytical framework, we discuss the impact of China's OFDI on technological progress. And construct the mechanism system of China's OFDI and technical progress. In the empirical analysis, For one thing, we apply granger causality test to analyze the causality of China's OFDI and technological progress, and utilize the VAR model impulse response analysis to study the interaction of China's OFDI and technological progress. For another thing, we use the gray correlation analysis to analyze the various industries' OFDI and industrial technology progress, for in-depth analysis of OFDI on the impact of technological progress. In conclusion, based on how to enhance technological progress with OFDI, the paper gives policy recommendations as three levels namely national, industrial, enterprise.