The Influence of FDI from Different Sources on the Innovation Performance of China’s Automobile Industry

DOI

10.2991/aebmr.k.191217.161How to use a DOI?

Keywords

FDI, Technology spillovers, Innovation performance

Abstract

With the development of economic globalization and regional economic integration, foreign direct investment (FDI) has become the main approach of international capital flows and international technology diffusion, and attribute to its spillover effects, the FDI is employed as primary objective of attracting foreign invsestment for the host country to promote domestic technological progress. Since the reform and opening up, the FDI has grown in large scale with the gradual improvement of China’s economic openness. With the deepening process of global integration, the world’s auto giants standing in the core of global value chain begin to realize the fact of increasingly saturated domestic markets and cost pressure, and have to transfer its industrial center. China attracts a large number of FDI by its huge market potential and advantage of abundant cheap labor. Mass FDI inflows based on Multinational companies could on the one hand help ease the shortage of funds and technical bottlenecks in the development of China’s automobile industry, but on the other hand introduce the competition pattern of global market which would strike on the market structure and competition pattern on China’s auto industry. With the rapid expansion of the FDI, an extensive discussion concerning the impact of FDI on the technological innovation of the automobile industry was carried out academicly and politically, and an increasingly people hold attitudes towards the effect of foreign investment from initial exaggeration to currently suspicion or even deny. In this paper, a study was carried concerning the influence of FDI from different sources on the innovation performance of China’s automobile industry. The general development and innovation status of China’s auto industry was firstly discussed, after which the time series data (1993-2017) of China’s auto industry was engaged, and then investigations were conducted upon quantity of patent applications and measurment of new products output value. The conclusion suggests that FDI plays a role promoting the innovation performance of China’s automobile industy through technology spillovers, and owing to cultural differences of home country, the FDI of various sources exhibits significant differences in technological innovation, technology transfer, the way into host market as well as its industry strategy, which is illustrated by the fact that FDI from opening culture like the Europe and the United States has an overweigh promotion effect compared to the closed culture like Japan and Korea in China’s auto industry innovation. As a developing country, China should expand the scale of foreign capital, make the best use of the FDI channel to attract advanced technology from developed countries actively and adjust the structure of attracting foreign capital continually, enlarge the proportion of the foreign investment based on technological innovation as the Europe and the US companies, encourage multinational corporations cooperate with China auto companies in the form of joint ventures, which would result in the maximize of the benefits brought by technology spillover effects and thus help China’s auto companies obtain a better position and ownership in the global division of labor by means of technological innovation.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Li zhao
PY  - 2019
DA  - 2019/12/20
TI  - The Influence of FDI from Different Sources on the Innovation Performance of China’s Automobile Industry
BT  - Proceedings of the 2019 International Conference on Economic Management and Cultural Industry (ICEMCI 2019)
PB  - Atlantis Press
SP  - 933
EP  - 942
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.191217.161
DO  - 10.2991/aebmr.k.191217.161
ID  - zhao2019
ER  -