Research On Technical Spillover Effects Of Foreign Direct Investment In Qingdao

Absorption and utilization of foreign direct investment is not only an important part of both extension of opening up and acceleration of market economy development, but also an significant measure of both accommodation to the economic globalization trend and active participation in international division of labor for China. Up to the end of 2010, the past 18 years have witnessed China as a developing country attracting the most foreign capital, thus being the world's most attractive area of foreign capital inflow. With the inflow of foreign capital, the purpose of our attracting foreign capital has shifted form the initial making up for shortage of domestic funds to promotion of domestic technical progress.There are mainly two positive roles of foreign direct investment against technical progress for the host economy: technical transfer and technical spillover. Because of strict control of multinational corporations, technical spillover has been a major way to obtain advanced technology for the host economy. However, studies by scholars at home and abroad have shown that FDI proves great differences in distinct countries and regions, and even negative spillover effects in some countries and regions. Qingdao, as one of the first batch of coastal opening-up cities, has formed a comprehensive, multi-level and wide-ranging opening-up pattern basically, after years of development. The investment environment is getting integrated and economic cooperation space is broader than ever. Great progress in rise of investment and increasing scale of foreign capital inflow makes FDI increasingly important for economic development in Qingdao, yet no one has conducted systematic research on how technical spillover effects of FDI are in Qingdao. Therefore, the paper chooses FDI and related economic data in Qingdao as object of study and conducts a comprehensive inspection into technical spillover effects of FDI in Qingdao.First, based on relevant research achievements, the paper summarizes related theories of technical spillover effects of FDI and analyzes development of FDI in Qingdao from aspects of size, structure, origins and investment manner. Second, the paper finds that FDI causes technical spillover effects to Qingdao on the whole, which is realized by measurement of total factor productivity (TFP) in Qingdao using Cobb-Douglas production function and analysis of long-term and short-term relationship between FDI and TFP using co-integration test and error correction model. Third, after research on dynamic changes of the overflow level between industrial domestic-funded and foreign-funded departments by the dynamic two-department model, it shows that foreign-funded departments results in positive technical spillover effects on domestic-funded ones, consistent to results on the whole. Finally, through index quantization of technical spillover channels such as demonstration, imitation, and market competition, the paper analyzes various channels'roles in FDI's technical spillovers in Qingdao, and finds that human capital flows and market competition are main channels of technical spillovers. Thus according to empirical results, the paper puts forward relevant countermeasures and suggestions to provide reference and mirror for utilization of foreign capital in Qingdao and relevant provinces and cities.