Analysis on the Impact of FDI in Eastern China on Local Innovation

Abstract

Innovation is an important strategic support for China to accelerate the building of a strong science and technology nation. As the largest developing country attracting FDI, China's FDI has become an exogenous driving force for development, and the technology spillover generated by FDI plays a key role in improving China's innovation capacity. In order to further study the impact of FDI on local innovation in eastern China, based on the panel data from 2008 to 2018, this paper takes 12 provinces, municipalities and autonomous regions in eastern China as research samples to make an empirical analysis on the data of FDI and the relevant indicators of local innovation capability. Based on the empirical results, it is concluded that FDI, R&D personnel input, the degree of trade openness and the level of economic development all have a significant promotion effect on the improvement of local innovation capability in the east, but R&D capital investment, on the contrary, has a suppressing effect on local innovation capability in the east to a certain extent. According to the conclusion, this paper puts forward some suggestions that we should attract high-quality foreign investment, invest R&D funds reasonably, increase the investment of R&D personnel and expand the level of opening to the outside world.