The FDI Spillover Effects In China’s High-tech Industry

High-tech industry is a strategic industry and has its prominent position in the whole national economy as well as in the manufacturing industry. It is also the focus of current international technological revolutions and the core indicator in valuating the competitiveness of a country. Since China’s entry into WTO, China’s high-tech industry has entered into a period of rapid development. Up to the 2011, China’s high-tech industry output value reached 8.84339 trillion Yuan, and laid its core position in the manufacturing industry.In addition to our strong government support, the development of high-tech industry is inseparably contributing to multinational enterprises’direct investments in China. Up to the year of 2011, foreign-investment enterprises contributed 62.92 percent of China’s high-tech industry total output value, it also accounted for about 60 percent of total employment in high-tech industries in the year 2011 So in addition to the macro-level contribution of multinational foreign direct investment in China’s high-tech industry, have their brought about micro-level technological progress and productivity efficiency enhancement to local enterprises? If so, we need to know which factors are affecting the magnitude of the technology spillover-effect?To answer these questions, we first performed on FDI spillovers theories, summarized the mechanisms of FDI spillovers and its diversion channels and its influencing factor. Then we introduced the status quo of China’s high-tech industries and the distribution of the industry’ s output level. Moreover, we establish a single equation econometric model using output as explanatory variables, using fixed-effects model, random-effects model and OLS method in our empirical study in order to testify the spillover effects of FDI and its influencing factors in China’s high-tech industry.The empirical results shows that:(1) Foreign direct investment in high-tech industry has brought significant technology spillovers to China’s high-tech industries; (2)Technology gap as well as foreign export ratio have a negative correlation with FDI spillover effects; (3) Increased proportion of state-equity can promote FDI spillovers; (4) R & D personnel ratio and the industry concentration have no significant influence to FDI spillover effects.Finally, we made the following recommendations:(1) take actions to absorb more FDI in the high-tech industry; (2) Encourage high-tech enterprises to update their product lines and increase their investments in R&D activities to narrow the technology gap between foreign and local enterprises; (3) Maintain a moderate degree for each high-tech industries; (4) Encourage high-tech enterprises to increase their exports; (5) Help enterprises establishing a sound management system for their R&D facilities..