FDI, independent innovation and economic growth: Evidences from the interprovincial experience of China

This paper menstruates the capacity of independent innovation of different Chinese provinces from 2000 to 2006 after theoretically analyzes the capacity of independent innovation. Then an output model of the capacity of independent innovation is constructed to test the effects of FDI on the capacity of independent innovation by regions. This paper tests the effects in eastern, western and middle regions respectively and gets the conclusion that FDI has a positive impact on the capacity of independent innovation of China overall. However, the impact is proved very notable in the eastern regions while it is relatively inconspicuous in the western and middle regions. What´s more, the input of human capital, instead of FDI, is the most important factor for the improvement of the capacity of independent innovation of China now. It´s now restricted for China to improve the capacity of independent innovation by introducing FDI.