JACIII Vol.23 No.3 pp. 536-545
doi: 10.20965/jaciii.2019.p0536


Causal Relationship Between FDI Flow and Technological Innovation in China and Japan

Chengkun Liu*, Xiuwu Zhang**,†, and Takashi Tamamine***

*School of Economics and Finance, Huaqiao University
No.269 Chenghua North Road, Fengze District, Quanzhou 362021, China

**School of Statistics, Huaqiao University
No.668 Jimei Avenue, Jimei District, Xiamen 361021, China

***Faculty of Economics, Kagawa University
2-1 Sakuracho, Takamatsu, Kagawa 760-8523, Japan

Corresponding author

October 23, 2018
January 11, 2019
May 20, 2019
IFDI, OFDI, technological innovation, one-way causality measure method

The improvement of a country’s technological innovation level is influenced by the technology spillover of inward foreign direct investment (IFDI) and outward foreign direct investment (OFDI). Based on the Coe and Helpmen’s theory of international capital flow model and one-way causality measure model, this study examines the similarities and dissimilarities between the dynamic effects of IDFI and OFDI on technological innovation in China and Japan to enumerate the differences in the utilization effect of FDI between developed and developing countries. The empirical results show that the one-way causality intensity of IFDI to technological innovation in China is weaker than that in Japan, but the FDI volatility in China is stronger than that in Japan. The one-way causality intensity of OFDI to technological innovation are low both in China and Japan, and the patterns of long-term and short-term effects are not identical. According to the results of our empirical research, we draw the conclusions and proposed suggestions for using IFDI and OFDI in China and Japan.

Cite this article as:
C. Liu, X. Zhang, and T. Tamamine, “Causal Relationship Between FDI Flow and Technological Innovation in China and Japan,” J. Adv. Comput. Intell. Intell. Inform., Vol.23 No.3, pp. 536-545, 2019.
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