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In an open economy, there are two main ways to access technology through external for developing countries:external market access type and internal technology transfer type. But the possibility of getting advanced technology from external market is getting smaller and smaller due to increasing competition between technologies. So the internal transfer of technology has become an indispensable form. Internal technology transfer is by way of absorption of foreign direct investment. FDI as a carrier of technology transfer, technology is transferred via an indirect way of overflow. The way of transfer advanced technology generally do not need to pay costs. So it is more important for the developing countries. At present, China is to one of the countries that have the largest number of FDI. FDI plays a crucial role on our country’s economic development and technological progress. The article is in the view of this situation and based on previous researches of FDI, discussing the technology spillovers mechanisms and affects of FDI and the enterprises how to absorb technology spillovers of FDI. To explore the situation, this study on the effective use of FDI technology spillovers in China to expand the FDI technology spillover effect will have important practical significance.This paper, under FDI Technology Spillovers theoretical framework, begins from the FDI technology spillover effect of the theoretical analysis, further analysis of the investor, the host country on FDI technology spillover factors, and the game theory model of market competition, absorptive capacity of the FDI technology spillover effects, then according to China’s actual conditions, from the absorption point of selection of human capital, infrastructure construction the two indicators, an empirical analysis testing the FDI on China’s technology spillovers case.FDI technology spillovers in stages along a certain path, the host should be in the introduction of technology, learning, application stage efforts to make the best use of technology spillover effect of FDI, while FDI technology spillovers should ensure that the main path:Model imitation, market competition, human capital mobility, enterprise and other channels before and after remain open to the association. Investment in the country’s investment policy and investment, host country policies to attract FDI, market competition and the absorption capacity will have an impact on FDI technology spillover effect, but the investment factor is the host country not to grasp. Only the host country to ensure domestic market, foreign firms, foreign firms within the full market competition, while the host country business requires a certain degree of human capital and technology reserves under the premise that we can get technology spillover effect of FDI. FDI in China by the actual situation of technology spillovers, FDI as a capital, the cumulative effect of the coefficient is negative, FDI and human capital combined with a positive spillover effect generated, but the combination of FDI and infrastructure construction for the negative spillover effects, so FDI spillover effect of technology on us China is uncertainty.For empirical findings, this paper Promote positive FDI spillover effects of countermeasures technology, is divided into two levels of government and business. Government level:quality of foreign investment, increasing investment in human capital, narrow the technology gap between domestic and foreign investment. Enterprise level:to strengthen the cultivation of enterprise technology professionals, enhance their own R&D capabilities.
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