The Reverse Technology Spillover Effect Of OFDI Based On Absorptive Capacity

Technological advances and internal driving force is the source and internal driving force of a country’s technological development and economic growth. In the current increasingly open world economy numerous studies show that, technological progress of a country not only depends on its own R&D investment, but also on the international technology spillovers. From the perspective of the actual situation in China, under the background that the current R&D investment is limited, R&D capability and technological level is still in low, how to promote the country’s technological progress through the effective use of international technology spillover channels becomes more important. As one of the important channels for international technology spillovers, in recent years, the size of OFDI is expanding, more and more scholars have gradually been concerned about reverse technology spillover effect, and it brings a large number of research papers. From the perspective of technology absorption capacity, we reviewed the relevant theory and related researches about OFDI reverse technology spillover and absorptive capacity over the world. Meanwhile we select capital, R&D strength, economic openness and the level of financial development as a measure of human absorption capacity. We analyze and empirically text the mechanism of action and effects of China’s OFDI reverse technology spillover and technology absorption capacity, in order to promote evidence support for studying the existence of reverse technology spillover effect of China’s OFDI. The results show that:(1) International R&D capital stock is indeed able to produce some of the technological advances promoted by OFDI. Specifically, through OFDI reverse spillover of foreign R&D capital stock for each1%increase in total factor productivity can promote our country increased by about0.0282%. This confirms the OFDI reverse technology spillover effect is real in China.(2)OFDI reverse technology spillover effect is constraint by the size and intensity of human capital, and there is a significant "threshold" effect. Only when the human capital stock is over8.4695, domestic R&D expenditure to GDP accounted for more than1.3735%, both the absorptive capacity can play a significant role to reverse technology spillover effect.(3)As the other two important aspects of the absorptive capacity,the level of economic openness, and financial development have not been able to play a significant role in upgrading the reverse technology spillover effect due to limitations of absorptive capacity "threshold" effect and the overall weak foundation’s sake. Finally, to further expand the reverse technology spillover effect of OFDI, the paper put forward policy recommendations based on the above evidence-based conclusions.