The Infection of Trade Policy to FDI Technology Spillover Effect -The empirical test on Bhagwati hypothesis base on the data of Chinese industries and regions

If FDI can bring technology spillover effect for the development of domestic economy is always a bone of contention, one of important factors influencing spillover effect is trade policy, this paper follow the view point of Bhagwati, dividing trade policy into comparatively free trade policy and comparatively protected trade policy. Considering the facts that imbalanced development in Chinese industries and Chinese regions, which lead to different protecting degrees about different industries and regions, this paper separately utilize section data of Chinese fractionized industries and two-department model, panel data of Chinese regions and region gross production function model validate Bhagwati hypothesis: comparatively free trade policy can lead to more technology spillover for domestic country than comparatively protected trade policy.