How FDI Affect The Technical Efficiency Of Domestic Enterprises

With the accelerated flow of the International Capital in worldwide, Foreign Direct Investment (FDI) has been one of the important technology diffusion patterns which gave priority to those foreign investing enterprises. In order to promote the development of the domestic economy and acquire the advanced the production technique, more and more developing countries take FDI as one of the crucial national policy. At the present time, China has been the number one in the aspect of attracting foreign investment among developing countries, the contribution of FDI can not be ignored in the growth of Chinese enterprises, updating of the industry structure and reducing unemployment. However, the effect of FDI on the technical efficiency of Chinese enterprises has recently attracted the attention of the authorities and academic world.Technical efficiency is one of the indispensable part of the total factor productivity, which is an important target on measuring the technical level of Chinese enterprises, therefore, for the current industry economy, study the effect of FDI on the technical efficiency of Chinese enterprises has the important and directive significance. So far, the view of host country can gain the effect of FDI technique spillover has been generally accepted theoretically, and through the tunnel of the competition, imitating and the link effect between the industries, FDI promotes the technical level of enterprises in the host country. But, there still are many scholars questioned the effect of FDI technique spillover, and after theoretical analysis, they find that the effect of FDI technique spillover is not obvious or positive, which is because influence of the FDI extrusion and scrambled of the market shares and R&D activities of domestic enterprises and created the negative influence of the long development, leading to the decline of the technique efficiency level.On this basis of literature review, thesis empirically analyzed the effect of FDI technique spillover on Chinese enterprises. First, we used the Time-Varying model of Stochastic Frontier Approach and Transcendental Logarithmic Production Function to measure the level of technical efficiency of Chinese enterprises. Second, we analyzed the mechanism and tunnels of FDI technique spillover. On the basis of this, the thesis chooses the panel data of28industries over the period2004-2009to regress, and analyze the intra-industry and inter-industry effect of FDI technique efficiency spillover on Chinese enterprises. We find that, the intra-industry effect of FDI technique efficiency spillover is positive, and inter-industry effect is negative.In order to analyze the effect of different tunnels, this thesis divided the intra-industry effect into three parts:the effect of competition, imitating and the flowing of human resources, and divided the inter-industry effect into two parts: forward linkage spillovers and backward linkage spillovers. We find that, through the tunnel of imitating and the flowing of human resources, FDI created the positive effect on the technical efficiency of Chinese enterprises and the effect of competition is negative, but, the sum of theses coefficient is positive, so we can see that the intra-industry effect of FDI technique spillover is positive; The forward linkage spillover is not obvious, and the backward linkage spillover is negative obviously. Besides, we find that the level of per capital, R&D of Chinese enterprises, the nationalization and competition of the industries all have effect on the technique efficiency of Chinese enterprises. Specifically, when the technological gap is on the small side, the effect of per capital and R&D on Chinese enterprises is positive, however, the effect of nationalization and competition restricts the promotion of the technique efficiency, when the technological gap is considerable, the only effect that can promotes the technique efficiency of Chinese enterprises is per capital.On the above analysis, the thesis made the main conclusions finally, and made proposals for promoting of the technique efficiency and increasing the effect for FDI technique spillover with pertinence, we hope that FDI can serve for Chinese economy development well.