Spillover Effect Of FDI In Manufacturing Industries

This paper firstly uses the Malmquist index to calculate the TFP of domestic manufacturing of Shaanxi and analyzes its TFP trends,also describes its patent applications to explain the technological progress of domestic manufacturing industry.Through the analysis of the technical characteristics of manufacturing FDI in Shaanxi Province we summarize the technology input of FDI such as human capital and R&D spending.On the basis of these descriptive analyzes,we select three top 500 multinational investment enterprises(Janssen,Samsung and Bosch Rexroth)from Shaanxi’s top three FDI manufacturing industries(Pharmaceutical manufacturing industry,Electronic and communications equipment manufacturing industry,Electrical machinery manufacturing industry),analyzing their investments in human capital,technology R&D and intangible assets,explaining its technology spillover channel and mechanism for domestic enterprises.Finally,we make an empirical study on the technology spillover effect of manufacturing FDI in Shaanxi with the panel data from 2009 to 2015,and use the “input-output table” to calculate the vertical spillover effect between industries.Considering that the lag of technology spillovers we join the current and lagged periods’ horizontal technology spillovers and vertical technology spillovers.The results of this empirical study show that horizontal and backward spillovers of FDI in Shaanxi are significantly positively in the current and lagged periods,while the forward spillovers not exist or even negative.Which shows that manufacturing FDI in Shaanxi Province has a positive effect on the growth of TFP and the progress of technology in the upstream enterprises,but not has any effect to the downstream enterprises.It can be concluded,the level of horizontal spillover effect is significant and the technology level of domestic manufacturing enterprises through continuous learning has crossed the threshold of absorption technology spill,the technology gap between the domestic and multinational investment enterprises is also gradually narrowing.They can get the new products knowledge and technology through multinational investment enterprises’ products or services in the market.The backward spillover effect in the vertical spill is significantly positively,and the forward spill is significantly negatively.The big difference between them is mainly due to: First,most FDI in Shaanxi Province is concentrated at the end of industrial chain,and the low correlation between domestic enterprises and FDI enterprises is not conducive to the absorption of technology spillover for domestic enterprises.Second,parts of the FDI in Shaanxi is still take a way to import from home country,which leads to the final outputs’ cost and the technology of products are high,so the downstream domestic enterprises have to make less procurement and it isn’t conducive to the downstream enterprises to learn new products knowledge and absorb technology spillovers.And finally we put forward three suggestions based on the results of the case analysis and empirical analysis: Firstly,strengthening the correlation between foreign and domestic enterprises,and promoting the vertical spillover effect of FDI.Secondly,improving the ability of local enterprises absorb technology,narrowing the technology gap between the domestic and FDI companies.Thirdly,focusing on attracting FDI in high-tech industry and strengthening the protection of intellectual property.