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Sustainable Technology Diffusion Manufacturing Outwards FDI Firms: Evidence from China Using Numerical Simulation Methods

Author

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  • Xiaohua Yang

    (School of Economics and Management, Hubei Circular Economy Development Research, Hubei University of Technology, Wuhan 430068, China)

  • Cheng Liu

    (School of Economics and Management, Nanjing University of Science and Technology, Nanjing 210094, China)

  • Jingling Lan

    (School of Economics and Management, Hubei Circular Economy Development Research, Hubei University of Technology, Wuhan 430068, China)

Abstract

Technology diffusion plays an important role in the improvement of technological innovation capabilities and can provide strong support for sustainable economic development. This paper aims to analyze the influence mechanism of technology diffusion on sustainable development, such as the initial investment willingness, technology spillover effects and absorptive capacity, technology transfer prices and intellectual property protection, government subsidy support and penalties. However, there is a lack of systemic game mechanism and numerical simulation methods for heterogeneous enterprises. Based on the government, OFDI companies, and domestic companies that are not involved in FDI, we have proposed the evolutionary game model for technology diffusion on sustainable development. The results show that: (1) The government, OFDI firms, and domestic firms are influenced by each other’s initial willingness to a different extent; (2) Different combinations of technology spillover and absorptive capacity lead to different sustainable evolution results of technology diffusion; (3) Reasonable technology transfer pricing and enhancing the protection of property rights can improve the efficiency of the technology diffusion sustainable development system; (4) Both financial support and penalties encourage technology diffusion sustainable development, but excessive financial support reduces the government’s willingness to participate ultimately. Therefore, this paper proposes that the government should increase its willingness to participate and increase punishment for unreasonable pricing behaviors. The stronger the stimulus effect of OFDI firm technology spillover and domestic firm absorptive capacity, the stronger the stimulus effect; however, there is a certain threshold effect, at the same time increasing the property rights protection of OFDI firms and the penalties for opportunistic behaviors of domestic firms, and establishing a diversified financial support policy, will increase the efficiency of the technology diffusion sustainable development system.

Suggested Citation

  • Xiaohua Yang & Cheng Liu & Jingling Lan, 2023. "Sustainable Technology Diffusion Manufacturing Outwards FDI Firms: Evidence from China Using Numerical Simulation Methods," Sustainability, MDPI, vol. 15(4), pages 1-23, February.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:4:p:3108-:d:1062089
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    References listed on IDEAS

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