Analysis On FDI Spillover Effect To China Automobile Industry

Since 2000,China automobile industry have got a rapid development,due to the entry of foreign direct investment(FDI).Based on the main vehicle manufactures,several automobile production bases have established accordingly,such as FAW,SAIC,Chang'An,etc.And almost all the famous multinational automobile corporations get cooperation with local automobile manufactures,established joint ventures.At the same time,the multinational automobile component suppliers,also accelerate their pace of entering China market.Current China automobile market is a monopolistic competition market lead by joint-venture brand,and the market share of local brand is decreasing.Since China has always support the policy ‘exchange market for technology'.It was more than 30 years since the foreign investment enter China market,but the local automobile companies has always in a awkward position.So,did the ‘market' have exchange with ‘technology'? Is there any promotion by FDI to China local automobile industry?This paper is based on the background above,and make empirical study on the spillover effect caused by FDI to China local automobile industry.Based on the panel data of China automotive industry during 1999 to 2013,we established a quantitative analysis model of local automobile company's labor productivity.We use software Stata to make regression analysis and test,and study the spillover effect of FDI and relative influence factors.According to the empirical analysis result,we got conclusions as below:The FDI's participation to China automobile industry is tend to a stable level,so the‘demonstration' spillover effect is not obvious.And the ‘competition' spillover effect caused by high labor productivity of foreign company is significant.But the local auto-company is still in imitation and low price competition,and lack of independent research and development capacity.So the future development strategy of China auto-industry should focus on,first to improve local party's control power at foreign joint venture company and reduce the dependency on foreign company,secondly to change current evaluation on performance to on independent research and development capacity.