Abstract
Due to the reform and opening-up policy, China has become one of the most attractive recipients of FDI,attributing a lot to the economic boom in the last three decades. The inflow of foreign investment has not onlybrought a package of capital, management expertise and production technology but also significantly spurredindustrial development through technology spillover. Such a diffusion effect can impose beneficial influence ondomestic economy through various channels: forward and backward linkages, demonstration or imitation effectand mobility of human resources. But since the occurrence of technology spillover is also conditional andrestricted by many factors, it is meaningful to understand what these constraints are, and propose correspondentapproaches to facilitate better utilization of FDI and technology spillover effect, both for domestic enterprisesand macro-economic operations.
Highlights
One of the significant global features in the last two decades is the steady rise in foreign direct investment (FDI) in line with globalization largely facilitated by technological development
The increase of FDI has brought a package of capital, management expertise and production technology (Johnson, 1972), which can help boost host country’s economic growth rate by supplying capital and facilities and spur industrial development through positive spillover occurrence
Multinational (MNC) spillover effect is divided as productivity spillover and technological spillover, which can be realized by breaking monopoly, demonstration and local imitation (Caves, 1974)
Summary
One of the significant global features in the last two decades is the steady rise in foreign direct investment (FDI) in line with globalization largely facilitated by technological development. The increase of FDI has brought a package of capital, management expertise and production technology (Johnson, 1972), which can help boost host country’s economic growth rate by supplying capital and facilities and spur industrial development through positive spillover occurrence. Multinational (MNC) spillover effect is divided as productivity spillover and technological spillover, which can be realized by breaking monopoly, demonstration and local imitation (Caves, 1974). Thereafter, Kokko (1998) systematically induced FDI technology spillover theory and categorized its occurrence into four circumstances including quality and marketing pressure to indigenous counterparts, inward and backward linkages to suppliers, and highly-skilled human capital turnover. In the era of globalization when technology competitiveness becomes a vital determinant for economic growth, we should pay more attention to its beneficial technological spin-off effects when introducing foreign investment than merely its capital resources
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
