Analysis of Spillover Effects of FDI

• Main Authors: Shao-Wei Huang, 黃少煒
• Other Authors: Yang Li
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/4249vk

碩士 === 國立高雄大學 === 經營管理研究所 === 103 === Foreign direct investment (FDI) cannot only bring capital and promote employment directly to host countries, but also indirectly create productivity spillovers, a concept that embodies the fact that MNEs (multinational enterprises) own technology, interpreted in a broad sense that includes product, process, and distribution technology, as well as management and marketing skills, which can be transmitted to domestic firms and thereby raise their productivity level. Hence, many countries offer considerable incentives to attract inward FDI recently, especially transition economies and developing countries. The spillover effects mainly result from the fact that there exists significantly technological gap between MNEs and domestic firms. However, because of different backgrounds, operational environments, FDI motivations and so on, MNEs come from some countries may embody the technology superior to those come from other counties, e.g. developed countries contrast to developing countries. Some MNEs, therefore, are very likely to gain spillovers of FDI as well as domestic firms. According to our survey, there is no research to investigate the spillover effect between MNEs. Since the beginning of reform, China faced serious problems of insufficient funds and technological backwardness. Hence, Chinese government offered many preferential policies to attract FDI in order to speed up industrialization and upgrade industry. According to website of World Bank, China is the second largest host of FDI in the world behind the US since 2009, and the second largest economy in the world, only behind U.S. since 2010. Goldman Sachs predicts that China will exceed US and become the world biggest economy by 2040. Many studies have found that FDI plays an important role in economic growth of china. Buckley et al. (2000) indicated that non-Chinese MNEs (NC MNEs) can generate technological and international market access spillover benefits for Chinese firms, while overseas Chinese MNEs (OC MNEs) only provide the international market access spillover benefit. NC MNEs are generally superior to OC MNEs in product and process innovation and in technological development. Hence, OC MNEs ought to gain spillovers from NC MNEs as well as domestic firms of China. Hence, this studytries to analyze the spillover effect of NC MNEs on the OC MNEs in China in order to complement our understanding of MNEs’ spillover effects.