Analysis Of FDI Technology Spillover Effect On Firm Indigenous Innovation Capability

Since reform and opening-up, the introduction of foreign capital has been increasing continuously which has led China’s economy to a rapid growth. However, in the background of globalization, private enterprises are facing more intensive challenges. Weak capacity of independent innovation has become a bottleneck to the internationalization of the private enterprises. To improve the capability of independent innovation, promote China’s transformation of the mode of economic development and industrial structure adjustment is very important. In an open economy, technology innovation depends on the digestion of foreign sources, so it is significant to analysis FDI technology spillover effect on firm independent innovation capability.Based on previous research results, this essay expounds the approach in which FDI spillover, including industry association, market competition, human capital flows. R&D localization, as well as the ability of domestic enterprise absorption. Through the empirical analysis model which include the factor of FDI scale, the scale of the enterprise and the rate of profit, and based on2007-2010industry panel data model regression, it indicates that after the financial crisis,the degree of China’s marketization, the rate of profit and enterprise scale have positive influence on technology innovation, but FDI has negative influence on the ability of domestic enterprises’ independent innovation, which means "market steal" effect is greater than effect that the domestic enterprise absorb FDI technologyThis paper puts forward the suggestions as follows:first, improving the quality of the introduction of FDI, selectting foreign direct investment enterprises, but also cultivate high quality and high level talents, create conditions to attract foreign capital enterprise personnel flow to the local enterprises, in addition, encourage enterprise R&D (Research and Development) input, and finally adopt new mode of innovation, the establishment of joint Development to improve the ability of enterprise’s independent innovation, realizing the sustainable Development of economy.