FDI, Import And Technolog Spillovers

In the context of the global production chain China’s imports and FDI showed twotypical characteristics. Firstly, China’ import of intermediate products take a very highproportion in total import; secondly, foreign invested enterprises (FIEs) in China relyheavily on import of intermediate products, and at the same time perform a strongexport-oriented characteristic. This paper’s main task is analyzing the spillover effects ofthese typical characteristics. Our main contributions include, firstly, in the context of theglobal production chain, we identify typical characteristics of China’s import and FDI.Secondly, we redefine a new and executable classification method of intermediateproducts, and we test their spillovers effects. Thirdly, combining with China’s trade flow,we define FDI’s crucial characteristics and test the spillover effects of FDI’scharacteristics.In the empirical part, we use a panel data of30provinces,2002-2009. Thedependence variables TFP calculated by DEA and Malmquist index method. Theindependence variables include import of intermediate products, import of final products,quantity of FDI, the characteristics of FDI, the interaction of fdi and characteristics ofFDI, human resource, capital intensity, R&D and so on. The SYS-GMM regressionmethod is used to cope with endogeneity. We also identify three distinct groups ofenterprises according to ownership: domestic enterprises, foreign enterprises and allenterprises.Our empirical research finds that spillover effects of importing intermediateproducts do not occurs in domestic enterprises, and the import of intermediate productsincreases the technology gap between foreign and domestic enterprises. The smallerdependence of FIEs on imports, the better spillover effects are, and the degree of FIEs’dependence on import could work together with the quantity of FDI to improve the TFP.In addition, the FIEs’ stronger export-oriented characteristic will produce worse spillovereffects.