An Empirical Study on FDI Knowledge Spillover: Spatial Econometric Models Based on Panel Data

Abstract

This paper utilizes Moran's I Index to investigate the spatial correlation of the regional technology innovation in China. Referring to the knowledge production function (KPF) by Griliches-Jaffe and the spatial lag econometric models based on Panel Data, the effects of four domestic factors is checked through the panel data of 29 provinces (cities/municipals) for the period 2000~2008. The study has shown that (i) FDI hasn't motivated the regional technological innovation in China but has even played a function of restraint for several reasons; (ii) The input of RD (iii) The technological innovation of a region could be influenced positively by the technological innovation in its neighboring regions. On the basis of the above-mentioned conclusions, this paper has brought forward concerned suggestions on the policies regarding to the strategies of FDI introduction in China and the development of regional technological innovation in China.