Technology spillover from outward foreign direct investment is one of the important ways to improve technological progress of the home country. Previous studies focused mainly on the spillover effects of technology from the host country to the home country, but paid little attention to the inter-provincial diffusion effect of these technologies. In fact, the absorption of foreign technology by a single enterprise cannot lead to national innovation. The major way of improving national innovation capability is to exchange technology inter-provincially. Furthermore, the international trade protectionism has made domestic technology transfer a particularly important way to achieve technological progress. However, previous studies of outward foreign direct investment discussed only the existence or non-existence of regional diffusion effect. They didn’t measure the diffusion, nor did they study the influencing factors of the diffusion process. To address this issue, we use Chinese provincial panel data from 2003 to 2013 to carry out a two-step study: Firstly, on the basis of discussing the reverse technology spillover effect of outward foreign direct investment, we measured the inter-provincial diffusion capacity. Secondly, we studied the impacts of bilateral product trade barriers, technology trade barriers and talent flow barriers on the spillover of inter-provincial diffusion of OFDI reverse technology. The first empirical study shows that there are two channels of OFDI reverse technology spillover: R&D spillover and absorption effect. Provinces which absorb technology spillovers will spread the technology to neighboring provinces. Two conclusions are found in the study of the diffusion. The first is that the two main reasons for the recent increase in diffusion are the increase of OFDI reverse technology spillover and the strengthening of inter-provincial trade. The second is that in the diffusion ranking, Beijing-Tianjin-Hebei, the Yangtze River Delta, the Pearl River Delta industrial zone and the proliferation of regional transport hub rank top. The third is that after the recent financial crisis, regional transport, rather than the spillover volume, plays an increasingly important role in the diffusion of OFDI reverse technology spillover. According to the above conclusions, in the second empirical study we select five provinces as central provinces which spread OFDI reverse technology spillover. The results are as follows: (1) Technological spreads of central provinces are negatively affected by the provincial trade barriers. Product trade barriers will reduce inter-provincial sales of new products and the formation of inter provincial industrial associations, which reduces the inter-provincial spillover of technology. Technology trade barriers reduce spillover of technology by increasing the contract cost of technology trading. Talent flow barriers add to the difficulty of talents dispatch, which weakened the inter-provincial absorption of technologies. (2) The reception of OFDI technology spillover by other provinces is negatively affected by multiple trade barriers. Product trade barriers hinder products of central provinces selling to this area, which reduces technology spreading. Technology trade barriers reflect the defects of the technology reception provinces’ technology trading market, and the lack of technology trading incentive reduces technology from flowing in. Talent flow barriers reflect the low absorption capability of technology reception provinces and obviously have negative effects on technology spreading. (3) The OFDI reverse technology spillover from R&D spillover and absorption effects are similarly affected by trading barriers. In both ways the OFDI reverse technology spillover will ultimately be solidified into specific technologies or innovative products, and thus be affected by the three bilateral trade barriers in the same way.