Impact of Foreign Direct Investment on Regional Innovation Capability: A Case of China

Foreign direct investment (FDI) has been traditionally considered an important channel in the diffusion of advanced technology. Whether it can promote technology progress for host country is a focused problem. This paper analyzes relationship between FDI and regional innovation capability (RIC). We find that spillover effects are not as signif icant usually thought. It found impact on RIC weak; entry no use enhancing indigenous capability. Moreover inward might have crowding-out effect novation domestic R&D activity. The research manifests increasing inputs, strengthening capabilities absorp tive capacity enterprises determinants to improve RIC.