Factorial Analysis Of Technological Spillover Absorbed By Domestic Firms From FDI

The problem whether spillover of FDI exists or not, causes great concern and leads further exploration. Since Caves(1974) pioneered the empirical analysis in the field, many scholars inflow the field of empirical test with developed countries, developing countries and economies over foreign direct investment spillovers, but the results are quite different. In such context, we attempt to construct a theoretical model,namely “spillover Source- spillover potential – spillover channels – the receipient” to analyze the factors affecting spillover effects, and try to apply Chinese manufacturing data to examine the theoretical hypothesis.This paper is divided into five parts, with review of the relevant literature of FDI spillovers at first. The second part introduces the status quo of China’s inward foreign direct investment, respectively, from the source, the overall foreign investment and its regional distribution, industry distribution, investment mode and other start. The third part gives the theoritical part of the paper.Inspired by connectors model, we construct the FDI technology spillover model, and on its basis we conclude the model with four factors affecting the spillover effect: spillover Source-spillover potential- spillover channels – receipient.In the fourth part we apply Chinese manufacturing data to test theoretical hypothesis and find that the spillover effect from Western invester is stronger than that from Hong Kong, Macao and Taiwan-owned; spillover potential generate positive adjustment effect for spillover;spillover exists not only within the industry, but also in the upstream and downstream sectors; spatial spillover effect is significant, namely spillover effects mainly exsit among domestic firms within the same province; Similarly, there is also lagging effects of spillover; Finally,spillover absorbed by state-owned enterprises is greater than that by domestic enterprises. The last part is based on the empirical results and we draw some conclusions and in the meantime give policy recommendations. The fifth part, on the basis of the empirical results, gains the main conclusions and gives four suggestions.