Technology Spillovers of Foreign Direct Investment in Coastal Regions of East China: A Perspective on Technology Absorptive Capacity

By establishing a foreign direct investment (FDI) technology spillover estimation model based on technology absorptive capacity and using provincial panel data of the coastal regions of East China from 2001 to 2010, we empirically conclude that FDI technology spillover effect in the coastal regions of East China is not significant. However, technology absorptive capacity is the determining factor of FDI technology spillover effect. Further analysis shows that technology absorptive capabilities respectively represented by institutional change and human resources have different effects on the endogenous economic growth and the FDI technology spillovers. To be more specific, the effect of technology absorptive capacity represented by the level of human resources on the economic growth and FDI technology spillovers is much more significant than that represented by institutional change.