Comparative Study on Reverse Technological Spillover of China’s OFDI among Different Worldwide Economic Groups and Regions

Abstract

This paper adopts the principle of Malmquist productivity growth index calculation to analyze the Chinese outward foreign direct investment (OFDI) for recent 10 years and its reverse technological spillover to the home country. To this end, the paper uses the two-stage (parametric and nonparametric) optimization approach to estimate the elasticity of China’s OFDI that contributes to the development of domestic reverse technological spillover and economic efficiency. Besides, in order to appropriately evaluate the effect of reverse technological spillover, this paper also utilizes the component of technological progress in the Malmquist productivity growth index to measure total factor productivity (TFP). Finally, this paper provides the comparative analysis of reverse technological spillover across worldwide economic groups and regions that China has the outward foreign direct investments (OFDI) with.   As a result, China’s direct investment overseas in recent 10 years exhibits an obvious positive effect on the reverse technological spillover domestically. Such effect is the largest from the African continent where China has direct investment, and is the weakest from the Asian continent. But according to the classification of per capita GDP criteria, the elasticity effect of reverse technological spillover on the Chinese OFDI hardly differs among groups of countries with different income classes. Besides, research results reflect that China, as the largest developing country, the outward foreign direct investment (OFDI) of an extensively large scale is just about to start, and the Chinese OFDI till now still shows an obvious motivation for seeking resources, while the proportion of technology-seeking type of OFDI is not enough.