Research on the Absorptive Capability of Technology Spillover from Foreign Direct Investment

The absorptive capability of host country is one of the key determinants of technology spillover from Foreign Direct Investment(FDI). Based on the previous research on this field, one roadmap of technology spillover is introduced, that is the technology spillover of FDI depends on the absorbability of host country. This paper proposes 3 factors affecting the absorbability to the technology spillover which include human capital, degree of economic openness and infrastructure. The empirical research based on the data from 1988-2005 in China and 29 regions of China shows that the human capital with college level education and high school level and infrastructure have positive effects on the absorptive capability of technology spillover from FDI.