Dissertation > Economic > Economic planning and management > Economic calculation, economic and mathematical methods > Economic and mathematical methods

An Empirical Study on FDI Technology Spillover Effects Based on Human Capital

Author KangNa
Tutor LiXing
School Nanjing University of Finance and Economics
Course International Trade
Keywords the Host Country’s Human Capital Multinational Companies’ Human Capital FDI Technology Spillover Effect
CLC F832.6;F224
Type Master's thesis
Year 2011
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As the integration process of world economic activity accelerating and deepening,International mutual investment had a rapid growth. Foreign direct investment (FDI) in host countries promoted technological progress and economic growth through technology spillovers. Human capital played an important role as a carrier of advanced technology and management experience. There is a strong theoretical and practical significance both in foreign policy and human capital policy to empirical study of human capital in the role of FDI technology spillovers.Firstly, with human capital and endogenous economic growth theory have been proposed, I analyze that human capital how to promote technology to economic growth. Then, through the driving mechanism of FDI technology spillovers, I conclude there are two aspects of human capital FDI technology spillovers involved: the host country’s human capital and human capital of multinational companies. The former will affect both their imitation of advanced technology and the ability of independent research and innovation. The latter will carry foreign advanced technology and management experience back to local businesses directly. In short, as the carrier of knowledge and skills, human capital is the main driver to promote technological progress and economic growth.The theoretical framework between human capital and FDI technology spillover effect was built by comprehensive analysis of human capital both the host country’s and multinational companies’.Empirical research was based on Borensztein classical model with a little improvement through subdivision of the human capital source (the host country’s and multinational companies’). The following conclusions after Chinese provincial panel data regression: (1) FDI improved labor productivity of domestic enterprises mainly because of FDI technology spillovers combined with human capital, not capital accumulation effect. (2) From the results of different level human capital, the higher human capital combining with FDI generated the largest technology spillovers, followed by the high human capital. (3) The human capital of multinational companies played a significant role in promoting economic growth, increasing gradually in eastern, central and western regions. (4)The human capital of multinational companies also promoted FDI technology spillovers combined FDI of the host country’s human capital. Finally, a series of specific policy recommendations based on empirical results came, including the development of local human capital policies and the development of transnational human capital policies. The former involve the development of a wide range of human capital investment model; the coordinated development of vocational education and higher education. The latter involve improve the introduction mechanism of multinational companies’human capital; and improve the development mechanism of multinational companies’human capital.

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