Analysis On Technology Spillover Effect Of Japan’s Direct Investment:A Perspective Of Intermediate Goods

With the economy globalization, it has been more and more necessarily for intra-product specialization to be an indivisible form of labor division. As a result, intermediate goods trade has emerged, which is the main foreign trade type in China though its history there is relatively short. Meanwhile, the scale of foreign direct investment in China is nearly the largest worldwide. With China gradually becoming the key point of foreign investment, Japan, as the second large economic giant in the world and the lead country in the Asian and Pacific area, whose investment to China has already leapt to the front row, which is only inferior to the US. So the relationship between FDI and intermediate goods are more and more worthy of researching.The Structure for this paper is divided into four parts. In the first part, we review the development and the situation of intermediate goods trade and FDI from Japan to show the possible relation between them reviewed the existing research results of domestic and foreign scholars explain the theoretical and practical meaning of this paper. In the second part, we simply analyzed reasons of the FDI from Japan to China, on the perspective of four factors. Then, we give the definition of trade effect of FDI in intermediate goods. Based on this, we compare VSS and other statistic data to illustrate the existence of trade effect of FDI in intermediate goods.In the five part, we define spillover effect of FDI in intermediate goods. Based on the modified model of Coe & Helpman (1995), we conduct two panel data analysis’s. By these analyses, we prove the existence of spillover effect of FDI in intermediate goods trade, also the existence of spillover effect of FDI in intermediate goods. We find that, the spillover effect of Japan’FDI in intermediate goods is quite different among intermediate goods trades with various types of countries, on perspective of technology efficiency (EC), technology development (TC), as well as total factor productivity (TFP). Then we try to explain the reasons of this spillover effect. From the total factor productivity (TFP), technological progress (TC), technical efficiency (EC), Asian,European and American countries’ direct investment medium of trade spillover effects are there, but specific to the nature of the spillover effect and there are significant differences between the size; Japan’s direct investment medium of the spillover effect really exists, but its nature and effect is also different.In the last part, in order to let the paper has more practical meaning, we give four policy recommendations based on the above research. First, consummating the related policies, optimizing the export products structure; Second, basing on our situation, dealing with the foreign competition; Third, adjustment the industrial structure, improving the diversity of spillover effect of FDI in intermediate goods; Fourth, increasing the investment of scientific research, promoting the introduction of high technology and new technology projects, and transforming way of economic growth.The innovation of this paper lies in the design a finite intermediate trade and industry association of the productivity index, describe FDI for the spillover effects of the medium actual ability and will produce what the role is, involves two contents: industry total factor productivity index (TFP) and the medium R&D spillover, among them, the latter and contains technology efficiency (EC) and technical progress (TC) two factors. Intuitively, the index could be considered in measurement unit finite intermediate overflow effect of industry included in total factor productivity change contribution. The establishment of measurement model, and properly handle the data, through the two groups of empirical analysis, make up for before scholars in lay particular stress on micro research and in industry level have vacancies, and technological overflow effect of FDI to produce, nature, form, and mechanism of the effect for the deficiency, and verifies the Japan’s direct investment in China finite intermediate technology spillover effect of existence, the specific properties, produce effect, based on their actual for our country, the response to foreign competition, optimizing export product structure, promote the transformation and upgrading of industry, as well as promote the finite intermediate trade diversification overflow, then put forward policy Suggestions.