FDI And Technological Progress’s Impact On Economic Growth:Sino-US Comparison

Since the reform and opening up policy, China has experienced three decades of sustainable and rapid economic growth, becoming the world’s second largest economy only behind the United States. Technological progress as an important part of economic growth plays a key role in improving the efficiency of capital and labor, FDI is an important influencing factor of technological progress from a global perspective. We divide the technological progress into three channels which we describe as technological spillover, technological imitation and technological innovation, then use country as a research object, and use China and the United States 1980-2010 annual time series data for empirical analysis, the empirical results show that China and the United States have big differences. China’s technological spillover has the greatest impact on economic growth, followed by technological innovation and technological imitation, technology spillover and technological innovation present a significant positive effect, technological imitation presents an insignificant negative effect. The United States technological imitation has the greatest impact on economic growth, followed by technological spillover and technological innovation, technological imitation presents a significant positive effect, technology spillover shows a significant negative effect, technological innovation has an insignificant negative effect. The reasons are that China’s technological level is generally lower than FDI and China’s R&D personnel have a low quality, while the United States technological level is generally higher than FDI, the inputs of technological innovation in the United States are excessive, resulting in efficiency decreasing. Finally, we propose that China should improve the quality of inward FDI, take full advantage of technological spillover effect and technology imitation effect of FDI, increase the quantity and efficiency of R&D personnel, increase R&D funds inputs, promote China’s technological progress mode from technology imitation to technological innovation, in order to achieve sustainable economic growth.