Foreign Direct Investment (fdi) On Technological Advances And Empirical Analysis

Economic globalization has been exerting comprehensive influence on every country in the world since the world entered industrialized and information society. Foreign direct investment (FDI) made by the transnational corporations plays a decisive role in the economic globalization.Technological progress plays an improving role in the economic development of countries and regions. Extensive researches indicate that FDI is a key factor which has great effects on technological progress. With China's access to WTO and the establishment of Great Mekong Subregion (GMS) and China-ASEAN Free Trade Area, many spheres of China begin to open to the outside world. As the bridge between ASEAN and China, Yunnan is blessed with geographical advantage and natural resource advantage. It is an urgent issue that requires study to make full use of these advantages and attract FDI so as to promote the technological progress in Yunnan.This paper conducts an empirical research on the relationship between foreign direct investment in Yunnan and technological progress by combing qualitative analysis and quantitative analysis. Based on the theoretical study of FDI in China and foreign countries, this paper analyzes and studies the status quo of FDI and development course in Yunnan Province and puts forward that Yunnan should make full use of FDI to promote its technological progress. Following a "general theory qualitative analysis-quantitative analysis-suggestion" thinking route, this paper analyzes several aspects as follows:Firstly, based on the analysis of international trade, technology transfer theory and regional economy, this paper makes a literature review on the study of FDI and the relationship between FDI and technological progress made by domestic and foreign scholars. Secondly, this paper analyzes the development and characteristics of FDI in Yunnan and the relationship between FDI and technological progress in Yunnan by comparative analysis. Thirdly, this paper makes empirical analysis of the development of FDI in Yunnan by improving the Cobb-Douglas production function. In addition, based on the economic statistical data from 1993 to 2008,the paper conducts an empirical analysis of time series of economic variables of Yunnan by using statistical analysis software Eviews6.0. Through the examination we find that foreign direct investment is correlated with technological progress in Yunnan. That is to say, foreign direct investment in Yunnan has promoted the technological progress of Yunnan. The correlation between FDI and technological progress is weaker if only seen from the influence of FDI on technological progress. However, FDI accounts for a small share in fixed assets investment in Yunnan. From the whole developing trend of global economy, we can see that the conclusion is positive and constructive. Finally, according to the current status of economic development in Yunnan, this paper puts forward constructive suggestions of attracting FDI from the perspective of government and enterprises.