Research Into Knowledge Transfer Based On Fdi Cluster

Under the background of economic globalization, foreign direct investment of multinational corporations (MNCs) has been increasing constantly within the range of the world, while it is not in the equilibrium. Multinational capital flow reflects the obvious clustering tendency in geography, which shows the characteristics of geography conglomeration and industrial conglomeration. Because of abundant capital, advanced technology and knowledge of management and marketing, MNCs obtain the international dominant status. Cluster of foreign direct investment means that knowledge of MNCs agglomerates within certain areas of the host country. Agglomeration of knowledge provides tangible resource like capital for the host country, and more important, it results in the effect of knowledge transfer via FDI cluster. Local firms absorb the knowledge transferred from MNCs, thus local capability upgrades and local economy increases.Currently, our country is facing several tasks, such as upgrading industrial structure, enhancing international competitiveness, and increasing the quality and level of using foreign capital. Therefore, FDI policy cannot rest on how to offer preferential measures to attract MNCs. China ought to consider FDI cluster as an approach to develop our country's opening economy, and take the countermeasures to integrate geography conglomeration with industrial linkage of MNCs'investment so that MNCs transfer more knowledge to the local firms.This paper combines FDI theory with knowledge transfer theory, trying to study knowledge transfer from MNCs to local firms from the view of FDI cluster. Firstly, this paper defines FDI cluster based on the comparison between FDI cluster and local cluster, describes the geographical character and industrial character, and explains formation mechanism of FDI cluster phenomenon. Secondly, the fourth sector demonstrates the advantages of knowledge transfer via clustered FDI compared with that via dispersed FDI, mainly analyzes the approaches and process of knowledge transfer within FDI cluster, and explicates the upgrading process of local firms based on transferred knowledge from MNCs. According to the foregoing theoretic study and the problems of China's FDI clusters and their knowledge transfer, the fifth sector comes to a conclusion that China should take effective countermeasures from two aspects, i.e. promoting the formation of FDI cluster and motivating knowledge transfer from MNCs to local firms within FDI cluster.