The reverse technology spillover of China's OFDI: Study for chinese service industry

OFDI(outward foreign direct investment) is a significant way to absorb high technologies from host countries to home countries. The latest researches claim that OFDI can have reverse technology spillover in the home country and enhance the motherland's technology progress. One of the main purposes of China's “going out” strategy is to gain the advanced technologies and improve Chinese firms' innovation capabilities. This paper conducts an empirical study on the reverse technology spillover effect from China's OFDI and how OFDI impacts the technology progress of the homeland, using the data from 1995 to 2014. It gives a conclusion that through OFDI, the R&D, human resources, IFDI and the international trade can impact the absorptive capability. According to the analysis, the conclusion can be applied to Chinese service industry. When Chinese service companies learn the new ideas, thus the service management system, tracking technology and other high techniques can be improved through OFDI and the technology spillover.