Foreign Direct Investment (fdi) And The Formation Of China's Independent Innovation Capability

Independent innovation has some different patterns. Since developing countries have the advantages of backwardness, they lean to choose innovation with assimilation. Therefore, FDI which is the headstream of advanced knowledge needs to do business with capacity of independent innovation.This paper deals with the relationship between FDI and the capacity of independent innovation, and considers spillover effects from FDI and independent innovation's endogenesis are the keys. Based on the form mechanism of independent innovation capability, it represents the proceeding of how FDI acts on independent innovation and explores the reasons for the different effects FDI brings about in different counties, such as Korea and those in Latin America.Moreover, this paper offers the latest information regarding FDI and Independent innovation in China. By using provincial data from 2000 to 2005, it discusses the effects of FDI on independent innovation capability in China. The regression result shows assimilation is very important to positive effects of FDI on the number of domestic patent applications. What's more, the effect in eastern part of China is more significant.In the end, the development of independent innovation has its external law. Considering the stage of China's economic development and the level of technology, innovation with assimilation is the best way to us. What we should do is to make good use of FDI, at the same time to improve interior and exterior conditions to upgrade China's independent innovation capability.