The Effect Of FDI Technology Spillover To Endogenous Innovation Capacity Of The Car Manufacturers

The multinational auto companies’usage of Foreign Direct Investment to build co-partnership companies in our car manufacturing industry is the main channel for the industry to absorb foreign investment. There are so many co-partnership companies now in the car industry since China’s policy of opening up.Our local car company hopes to learn from the co-partnership companies to improve the endogenous innovation capacity and make themselves stronger.Technology spillovers of FDI as an external resource to the enterprise’ s innovation ability plays an important role. With the increase of absorbing FDI in our country, more and more multinational companies speed up the localization of the R&D process. Through the imitation and competition between enterprises, industry collaboration between the upstream and downstream enterprises, the flow of talent, etc, our local enterprise technological innovation ability was significantly improved. But as to the economic growth in China, foreign capital can be said to be an initial exogenous variables, and endogenous technology innovation ability is the impetus for the sustainable development of economy, so that foreign capital through its own development making a contribution to our country economic growth at the same time, it can not say to what extent it has brought in advanced technology. If we specify to the automobile industry in our country, and even to large or small enterprises in the industry, the enterprises how to perceive and make use of the technology spillover of FDI as they wished to?In this paper,the analysis will be from the FDI technology spillover’s ways, namely the demonstration effect and competition effect, mobility effect and the correlation effect, from the micro perspective, selecting typical automobile companies, namely, SAIC group and GEELY as examples. This paper analyzes the four effective ways of FDI technology spillovers, analysis of the mechanism, influencing factors, the effect or overflow effect, and the absorbing ability of the enterprise’s role in using FDI technology spillovers, thus trying to find out suitable for different car companies in China, here we classified the car industry into two categories, one is with foreign joint venture and setting up joint venture of China automobile group, and second, China’s local enterprises or private enterprises, which do not receive foreign capital injection or establish a joint venture company, such as GEELY, Great Wall, BYD and other Chinese car companies to analyze the usage of FDI technology spillover to promote independent innovation ability, at the same time, through detailed analysis to point out that China’s car companies are taking advantage of FDI technology spillovers while having their own limitations or disadvantages, and points out that Chinese car companies can’t put all their eggs in one basket, or take the FDI technology spillover as the only way to promote independent innovation ability or an very effective way. China’s auto enterprises must proceed from their actual situation, analysis of their situation, and rational utilization of FDI technology spillover effect, and ultimately to get the result of making the maximize spillover effects of FDI on Chinese domestic companies and find the reasonable way to avoid the effect of risks.Finally, based on the basis of the above analysis for the effective use of FDI technology spillovers, the paper puts forward the reasonable countermeasures and suggestions to domestic auto enterprises in our country. In detail, in view of the Chinese car companies like SAIC, they need to fight for the. leading power in the cooperation company and try to build research and development organizations with FDI. In view of the private enterprises such as GEELY automobile, the paper also puts forward some countermeasures to promote independent innovation ability correspondingly, namely building or introducing better employee incentive mechanism, from simple imitation to deeper research and increasing the cooperation with the components companies on research and development. China’s domestic car companies do not go far enough. Now the competition in the Chinese car market is very tense, including that the consumers’preference and multiple characters. It means a big challenge to Chinese car manufactures.