Comparative Study Of Technology Spillover Effect Between The Solely Foreign-owned Enterprise And The Joint Venture

It is universally acknowledged by the international community that thetechnology spillover effect of foreign direct investment (FDI) is one of the mostimportant channels to obtain the advanced technology from multinational companies(MNCs). Because it can not only fill the financing gap of the host country, but alsopromote technology progress via the technology spillover effect caused by technologytransferring. So the technology spillover effect of FDI has been a hot issue oftheoretical cycle.Since the reform and opening-up, under the guidance of “bring in” and“goingout” strategy, China has achieved great progress in absorbing foreign directinvestment. The pattern of absorbing foreign direct investment by China has graduallytransferred from joint ventures and cooperative enterprises to solely foreign-ownedenterprises, and now the situation of independence of MNCs has taken shap. Theoriginal intention of exchanging market share for technology is unsuccessful, whichhas been proved with the practice of absorbing foreign direct investmeng in Chinaover the past30years. Some domestic scholars consider that the independence ofMNCs is the obstacle to the technology spillover, and others hold opposite opinions.In this paper, the result is that the technology spillover effect of solely foreign-ownedenterprise is greater than that of joint ventures via empirical test, using data from2000to2012of Chinese Statistical Yearbook. And the study has a certain reference valuefor establishing policies of attracting investments from overseas.In this paper, the main structure is divided into two parts: introduction and text.In the introduction, the paper introduces the background, purpose and significance ofselecting this topic, following with the literature review of FDI technology spillovereffect and research methods, innovation and shortcomings of the paper. In the text,firstly the paper reviews theories and main channels of FDI technology spillovereffect briefly. Secondly, the paper discusses the development, characteristics and theindependent tendency of FDI in China. Thirdly the paper estimates the technologyspillover effect between solely forein-owned enterprises and joint ventures withmultiple linear regression model based on Cobb-Douglas production function. Finally, the paper puts some advices on how to improve the technology spillover effect ofFDI.