Absorptive Capacity, Technology Spillovers And Domestic Firms’ Productivity Progress

In Guangdong Province which is the first implementation of the reform and opening up policy, Foreign Direct Investment (FDI) became an important economic indicator. Existing researches showed that the impact of FDI was not only manifested in the financing, but also in terms of technology spillover effect on domestic firms. In order to take full advantage of technology spillover to enhance their productivity, domestic firms should pay more attention to their absorptive capacity.In theoretical part, some researches around FDI technology spillover and its influencing factors especially absorptive capacity are firstly reviewed. Then on that basis, the article analyses the adjustment mechanism of absorptive capacity. In empirical part, based on the heterogeneity among enterprises and among industries, the writer respectively examines the effects of the absorptive capacity on the relationship between technology spillovers and productivity growth.According to the empirical results, the writer finds that FDI significantly affects the productivities of domestic firms in Guangdong, especially private firms. The absorptive capacity moderates the relationship between technology spillovers and firms’ productivity progress. The moderating effect turns to be positive through backward linkages and negative through horizontal channel and forward linkages for the whole domestic firms and private firms. This effect of absorptive capacity is not significant on the state-owned firms and foreign firms. Based on the different nature of the industries, absorptive capacity’s moderating effect shows to be positive through backward linkages for the firms who belong to the capital-intensive or the technology-intensive industries, and shows to be negative through horizontal channel for capital-intensive firms. The writer finds no significant moderating effect of labor-intensive firms’ absorptive capacity.Based on the researching conclusion of this article, some relative policies can be listed:local enterprises should be encouraged to vigorously enhance the absorption capacity, and strengthen the association with foreign enterprises. The labor-intensive firms are best to improve the awareness of technology content and technology absorption...