The Study On Reverse Tchnology Spillover Effect Of China’s Technology-seeking Foreign Direct Investment In European Union

With the growing trend of economic globalization, enterprises are facing fiercecompetition, and technology has become a key factor of the competition. As a maininternational technology spillovers vector, technology-seeking outward foreign directinvestment (OFDI) would have important influence on the technology progress ofMotherland. In recent years, foreign direct investment grew rapidly in developingcountries, a growing number of developing countries trying to obtain internationalreverse technology spillover through OFDI. However, in the study of domestic andforeign direct investment in the reverse effect, on the selected object of study does nothave targeted. Since the reform and opening up, along with the "going-out" strategy,OFDI in the EU has made significant development, which made the study of China’sdirect investment in the EU seeking technology of reverse technology spillover effectpossible.Based on the the theory of direct investment and the summary of relatedliterature, this paper reviews the course and current situation of China’s directinvestment in EU, including the investment scale, location distribution, industryselection, mode of entry and so on. Then it analyzes the mechanism of technologicalprogress in the aspect of the micro (enterprise), meso (industry) and macro (national)in the home country. After that, this paper summarizes the technological factorsaffecting the reverse effect of the home country and then analyzed from theperspective of the host country. Based on the theoretical analysis, this paper employsthe data of the E U’s foreign direct investment to estimate foreign R&D capital stockthrough OFDI channels on the base of LP models and use international R&D spilloverregression method, and use state-space model with varying parameter modelconstructed on the reverse technology spillover effect on TFP to made empiricalanalysis. The results show that foreign direct investment generated by reversetechnology spillover can have a positive impact on total factor productivity, but theeffect is small. The main reasons are that the scale of China to EU technical-seekingOFDI is small; EU investment in technology-intensive industries concentrated is in arelatively low degree of industry. The richer human capital, the higher degree ofeconomic openness and stronger intellectual property protection of host country isgood for our technology spillovers reverse absorption. The effect of technology gapbetween China and EU is certainty. Based on these conclusions, some suggestions are put forward from micro enterprises and government macro perspectives in thefinal part.