Download Analysis on Technology Transfer from Global Trading and Related Measuring Indication

Analysis on Technology Transfer from Global Trading and Related
Measuring Indication
ZHANG Rugen, LI Chunmei
Heilongjiang Institute of Science and Technology, P.R.China, 150027
[email protected]
Abstract: Mainly researches effects of technology transfer of the international trade and establishes the
model of based on catching up theory, analyzing the tremendous influence of opening up level to the
outside of a country on technology transfer, points out the promoting functions of international trade to
technological progress, at last puts forwards a few proposals to accelerate technological progress of our
China.
Keywords: Technology transfer international trade
1 Introduction
With an upsurge of economic globalization, trade liberalization and liberalization of international capital
flowing are increasing. Scientific and technological advancement and the rapid development of
knowledge-based economy make international competition more and more perform for the technical
level and the accumulation of knowledge competition. Technology transfer has become the most
important impetus of contemporary economic growth.
1.1Technology diffusion
The process of technology diffusion is that advanced technologies shift from the high potential energy
position to the low potential energy position. The developed countries usually diffuse outward
technology and gain the economic interest through the below ways
1 Output the materials, products, equipments of high technological content, namely carry on
international merchandise trade.
2 Direct foreign investment.
3 Directly transfer and sell the new technology and the new craft, namely carry on an international
technology trade.
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1.2Technology spill-over effects
The transmission way of technology spill-over effects mainly includes:
1 Demonstrational and training effect. In the preparatory phase of international trade, in order to
facilitate the import side to understand the performance of products, reduce the information asymmetry
and cognitive differences to commodity, the output will show a certain extent the characteristics of their
products stating quality, features, functions and using ways of their new products, resulting in some loss
of technological innovation.
2 Foreign and local businesses associate front and back. That is, domestic enterprises as the identity
of the supplier (backward linkages) form a long-term trading relationship with customers of foreign
high-quality products(forward association), thus receiving a more comprehensive technical support of
foreign investors, as well as after-sales service and technical training. Which are of great significance
for domestic enterprises to improve production process, improve the production technology level, and
strengthen the development of new products.
3 Technical imitation. While advanced countries will transmit new products to developing countries,
the importing country has been brought about the motive of imitating production, and the nature of
imitating production is a process of learning new technologies and new techniques, in the process,
technology began to overflow, importing country's technological level has improved.
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（ 4 ）Technical competitive effects. When facing the competition of investing enterprise of the
multinational corporation, the original enterprise in leading position or even monopolistic position in
domestic in order to maintain market competitiveness will rapidly increase productivity, enhance the
management level, reduce the production cost, improve product quality, strengthen the technology
progress and Upgrade its technology level. Competitive pressures arising from transnational
corporations are an important impetus to upgrade the technological level of China's telecommunications
equipment, automobiles, engineering machinery, power station equipment, and many other
industry-funded enterprises.
5 Learning-by-doing effect. The majority of transnational corporations in China produces in China,
foreign-related processing enterprises imports foreign key raw materials and equipments for the
assembly, exploring, understanding and absorbing foreign knowledge and technical know-how, in the
processing, and gradually mastering the ability to produce these intermediate products to continuously
improve the product domestically. The products are sold abroad in the process, foreign consumers can
have feedback to performance of products, so that enterprises can improve product structure according
to market demand, increase product sales, while promote innovation and learn world new technologies.
6 Contagion effect. Practice has proved that the more open country , there will be greater chance to
learn advanced technology from other countries , the U.S. economist Findlay explained this
phenomenon with "contagion theory". The theory compares technology to infectious diseases: it can
spread far and more people come into contact ,the more quick speed of the spread .Fast. contacts and
exchanges With the inventor or the receiver of technological innovation, technological innovation can
be effectively copied.
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2 The model of technology transfer theory
2.1 The model of catching up theory by Veblen and Gerschenkron
Assume that there is the developed country A and the developing country B. TA (t) and TB (t)
separately represent the technical level of the two countries in the t time. KF (t) and KD (t) represent
quantity of overseas national capital and domestic capital about B .we define,
x=
TB (t )
K (t )
X (t ) + M ( t )
;y = F
;z =
TA (t )
K D (t )
G D P (t )
(technical ratio two countries) (foreign capital dependency of B country) (foreign trade dependency of B
country)
The theory is that: as long as the technology of the backward countries reach a certain level, then
technical level disparities between the two countries are greater, then the speed of the international
technology transfer is greater. The FDI and trade is an important channel for technology spillover.
Therefore, we can give the following expressions,
ε = f ( x, y , z )
And
η = g ( x, y )
df
df
df
dg
dg
< 0; > 0; > 0;
< 0;
<0
dx
dy
dz
dx
dy
Assume Z as exogenous variable in this system,
When ε ′ = 0 and η ′ = 0 System achieve a balanced state,
，
(
0 = f x, y , z
( )
0 = g x, y
TT represents curve
)
ε ′ = 0 （Technology transfer speed line）, we have:
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0 = f ( x, y, z )
Differential,
0 = f x dx + f y dy + f z dz
The partial derivative of y with respect to x is:
f
∂y
=− x >0
fy
∂x
That TT is an upward inclined curve,
KK represents curve η = 0 FDI growth rate line , we can have:
（
）
0 = g ( x, y )
Differential,
0 = g x dx + g y dy
The partial derivative of y with respect to x is:
g
dy
=− x <0
dx
gy
That KK curve is a downward inclined curve.
TT curve intersect KK curve at the point of equilibrium. In a balanced state, the technology gap between
A and B country is a constant; The proportion of foreign capital and domestic capital is also a constant.
However, because
df
> 0 , the equilibrium value x is increasing function of the z. Namely the trade
dz
may make technology differences further narrow, but will not make a technical difference reversed.
foreign capital degree of dependency
（
）
KK
TT
D
E
C
Figure 2-1: capital flows, trade and technology transfer (relative technical ratio)
2.2 The impact of the different open policy of the backward countries on technology progress
Following we analyze that the impact of the different open policy of the backward countries on
technology progress.
2.2.1. Closed economy
If an economy B is completely closed and relatively backward technology, foreign direct investment is
zero, thus Y is equal to zero, then B lies in a point of X-axis coordinates, as C spot. This economic
technological progress is entirely endogenous, without any international technology transfer and
technology diffusion, so "the delayed advantage " also does not exist. Since the technical accumulation
degree of the backward countries is lower than that of the advanced countries, the growth rate of its
technology TB is less than the growth rate of technology TA in advanced countries and relative
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technology X of the backward economy will reduce gradually. In Figure 5-1 ,that represents that C spot
move to O, and the technological gap between the backward countries and the advanced countries is
getting greater.
2.2.2. From a closed economy to an open economy
When the economy B change from close to open, because of the technological gap, foreign direct
investment of the economy B began to appear and gradually increase. FDI and international trade is the
main channel for technology transfer, and the speed of technology transfer and proliferation is in direct
proportion to foreign capital dependence and foreign trade dependence, therefore, at the beginning, the
speed of technology transfer is slow and the rate of the growth of technology progress of B country are
still below that of A country. In figure 2-1, the spots of the relative technology and foreign capital
dependence of B country on the curve from the C to D. Those which need the specially explanation are
that , when the country B move from C spot to D spot, although the relative technology X is in reduction,
technical level of the country B grow faster than that in closed time because of its technological
innovation and technology transfer of international trade.
2.2.3. The economy tends to be completely open
When FDI increases to a certain extent, namely in figure 5-1 when foreign capital dependence of the
country B surpasses the D spot, then the value of X and Y also increase at the same time, from the spots
on curve DE gradually converge at equilibrium E. A high level of openness of the countries and regions
can elaborate "the delayed advantage", through international trade study and absorbing the more
advanced technology of advanced countries. At this time, the rate of technology progress of the
backward countries will be faster than that in advanced countries. 1970s and 1980s, the "four little
dragons in Asia" adopted an open economic policy and actively introduced advanced technology of
developed countries, attracted a large number of foreign direct investment. During this period, the
technological progress and economic growth of the "four little dragons in Asia" were very fast.
2.2.4. Balanced state
At equilibrium E, technology gap between the backward countries and the advanced is a constant. The
two countries gain technological progress by the same speed. The foreign capital dependence will also
be a constant. That is, no matter how open a country, it is limited for the country to achieve
technological progress relying on international technology transfer.
2.2.5. The impact of foreign trade dependence on equilibrium
In figure 2-2, foreign trade dependence will affect the position of curve TT, increases of foreign trade
dependence will make TT curve move right. In addition, the foreign trade dependence degree does not
change the location of KK. E equilibrium move to E ' equilibrium and the relatively balanced
technology will increase.
Y
KK
TT
TT/
E
E/
X
O
Figure 2-2: capital flows, trade and technology transfer
The above analysis shows that the international technology transfer can narrow the technology gap
between developed countries and backward countries, but they can not catch up even not over the
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technical level of developed countries. So, does the backward country forever falls behind? Of course
not, because we have not considered the self-technology innovation of the backward countries in above
discussions. Technology progress includes the endogenous technology progress and the exogenous
technology progress. The former may be called self-type technology progress and the latter may be
called acquired technology progress. If a country can organically unify two kinds of technology progress,
it Is likely to quickly catch up with and surpass the advanced world level.
3 Indication
Our country couldn’t invest move R & D finance cause our nation’s fund are constraint. So, we are not
good at technology innovation. We should make good use of international trade to promote technology
progress.
3.1Enhance foreign trade, make good use of technology
Economist Helpman had investigated the diffuse of technology R&D in the world, showed that: when
US R&D charge increase 1%, the average product rate in developing country will increase 0.04; when
the R&D charge invest Europe and Japan increase 1%, the average product rate in developing country
will increase 0.02% and 0.01%. So, we should make bigger progress in foreign trade system, enlarge the
power and scope of the enterprise export, let enterprise take part in international competition directly,
and make good use of technology diffuse and overcharge to accelerate technology progress.
3.2 Attract multi-national corporation which has big potential in technology develop to invest in
china
Government can use industrial Preferential policy, such as market permission, fax reduction, to inspire
multi-national company of computer, communication, bio-technology, medical engineer, new-material
invest in china. The product and technology of these industries is important for cultivating the new
industry and developing our traditional industry. And these technology is un-mature, have a bright
future in progress, the multi-national company will input move human resource capital.
3.3 Accelerate technology diffuse and overcharge of the multi-national
First, government can construct training fund according to the difference of industry, and then improve
the capital contribution of multi-national. Then, government can make the requirement of the local
ingredient product according to the difference of industry, and rule the strict foreign capital balance.
This policy can make multi-national company transform foreign supplier to domestic country, then
improve the level of production directly.
3.4 Combine the technology innovation and impress together
We should make good use of international trade and let if be a channel for technology impress and
overcharge, and import, learn, digest foreign cutting-edge technology positively, then innovate at this
foundation, spare no effort to gain more benefit with technology progress
3.5 Combine technology and comparative advantage
On the one hand, we should pay attention to technology innovation. On the other, we should use
high-tech achievement to reform traditional labor-intensive industry, improve technology level and
additional value. We should combine comparative advantage and technology progress, on the base of
use domestic country advantage, we can make rapid progress through technology innovation, system
reformation, structure revolution method.
4 Conclusion
International trade and foreign direct investment is the main channels of international technology
transfer and the spillover. One of the main purposes for China to carry out Opening-up policy is to
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introduce advanced foreign technologies, equipment and management experience and organizational
capacity. Researching and imitating on imported advanced products can inspire the sense of innovation
of enterprises. During export process, the foreign consumer demand will force enterprises to improve
product performance and product quality. Foreign direct investment brings about exemplary role
directly and competition. While contacting with foreign counterparts, the enterprises will obtain useful
information and technology, technology spillover is more likely.
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