The Threshold Effect Of FDI Technology Spillover

Since the reform and opening, China has been promoting the active policy ofattracting foreign investment, the scale of FDI is getting bigger and bigger, which isplaying the important role in promoting Chinese economy and technology. However,different industries`spillover effects of FDI are diverse, some industries`spillover ofFDI are even negative. The characteristics of the industry is one of the most importantfactors, the effect of industrial agglomeration is more obvious.The purpose of thispaper is trying to figure out the influence to technology spillover of FDI fromindustrial agglomeration through understanding and analyzing the industrialagglomeration and FDI. Through the analysis, we know that the spillover effects ofFDI changes with the increase of industrial agglomeration, but they don`t simplechange in the same direction. There is a boundary of industrial agglomeration, in thecertain boundaries, these changes appear certain regularity. The empirical analysisalso shows that, there is a threshold effect on spillover effects of FDI. In differentareas, the line relationships between industry agglomeration and spillover effects ofFDI are different. China should make different policies according to thecharacteristics of industry. The government should make full use of industrialadvantages, increase the level of FDI, strengthen the industrial agglomeration,enhance the industrial competitiveness, which can make more efficient use ofresources, realize the upgrading and optimization of industrial structure.