The Technical Spillover Effect Of FDI On The Human Capital

When foreign direct investment influences the economy of host country， there aretwo main ways: capital and technical spillover effect. The technical spillover effect offoreign direct investment is an important way for host country, especially the developingcountries, to get the world advanced technology and catch up with the developed countries.China, as the largest developing country in the world, compared to other counties may paymore attention to foreign direct investment. Furthermore, there is much factor affects theproduce and level of technical spillover effect of foreign direct investment, but the humancapital of the host country is particularly important.In this research，we will study while the human capital of Shandong province effectsthe technical spillover effect of South Korea’s direct investment or not. On the base ofC-D production function, from the empirical analysis we know South Korea’s directinvestment has no visible technical spillover effect in Shandong province；but the effectwill happen when the human capital of Shandong province takes part in. Therefore，inorder to make better use of the South Korea’s direct investment to improve economy andtechnology of Shandong province，we should pay much attention to the addition of humancapital of Shandong province.