Research On The Impact Of Foreign Direct Investment On China's Entrepreneurship And Innovation

Innovation is the soul of social progress.Entrepreneurship is an important way to promote economic and social development and improve people's livelihood.Innovation and entrepreneurship are integrated and coexist.Since the introduction of "mass entrepreneurship and innovation",the government has issued a large number of policies to encourage entrepreneurship and innovation,further systematically optimize the entrepreneurial and innovative ecological environment,strengthen policy supply,break through the bottleneck of development,and fully release the entrepreneurial innovation potential of the whole society.Under the vigorous promotion of various policies,China's level of entrepreneurship and innovation has continuously improved,providing a strong and powerful internal driving force for the transformation of China's economy.At the same time,China's opening up to the outside world has gradually increased,and the introduction of foreign direct investment(FDI)has provided continuous external drive for China's reform.As an important external source of advanced technology,FDI spillover effect plays a crucial role in the improvement of China's entrepreneurship and innovation level and quality.Therefore,based on China's unique institutional environment,this paper systematically studies the impact of FDI on China's ntrepreneurship and innovation on the basis of considering the interaction between entrepreneurship and innovation,and provides theoretical and empirical support for China to further build an open economic development system.This paper uses the traditional FDI theory and institutional theory to establish a theoretical analysis framework of "behavior-environment-performance" to study the behavior of FDI in multinational corporations,including the impact of FDI entry scale,FDI entry speed and FDI entry mode on China's entrepreneurship and innovation and the regulatory role of the institutional environment in this process.The framework shows that FDI can bring positive technology spillover effects to local enterprises through demonstration effect,forward-backward linkage,personnel flow effect,that is,crowding-in effects.On the other hand,through competitive effect and market and labor stealing effect,FDI can bring negative spillover effect on local enterprises,namely the crowding out effect.The final impact of FDI on entrepreneurship and innovation depends on the interaction between the crowding-in effect and the crowding-out effect.Based on the unique institutional background of China's reform period,cosidering the interaction between entrepreneurship and innovation activities,this paper empirically studies the impact of FDI on entrepreneurship and innovation by using China's provincial panel data from 2001 to 2015.The paper analyzes the impact of FDI entry scale,FDI entry speed and FDI entry mode on entrepreneurship and innovation,and the differences between FDI and entrepreneurship and innovation in different institutional environments.The results show that:(1)FDI entry scale has a U-shaped relationship with entrepreneurship and innovation.China's current foreign investment level is still on the right side of the U-shaped curve.Therefore,the government should continue to expand its opening to attract foreign investment.In addition,the impact of FDI entry scale on entrepreneurship and innovation in different areas of entrepreneurship and innovation activity is different.Therefore,when formulating foreign investment attraction policies,local governments should maintain a cautious attitude and formulate different policies for different regions.(2)Wage level and financing constraint have a mediating effect on the U-type relationship between FDI entry scale and entrepreneurship,and R&D personnel investment and R&D expenditure have a mediating effect on the U-type relationship between FDI entry scale and innovation.Therefore,the government should strive to eliminate foreign entry barriers such as market entry barriers,high wages,and labor theft to reduce the crowding out effect of FDI.In addition,we should continue to encourage independent innovation and development of local enterprises,reduce dependence on foreign capital,and avoid negative effect of foreign investment in industrial security.(3)FDI entry speed has weakened the U-shaped relationship between FDI entry scale and entrepreneurship and enhanced the U-shaped relationship between FDI entry scale and innovation.Therefore,the speed of attracting investment should be reasonably controlled,and the different effects of entrepreneurship and innovation should be weighed to achieve the best effect.(4)Joint venture FDI and sole proprietorship FDI can promote innovation.Joint venture FDI has significant positive effect for entrepreneurship,and sole proprietorship FDI has a significant negtive effect on entrepreneurship.Since joint venture FDI has a significant role in promoting entrepreneurship and innovation,it can adopt a method of encouraging attracting to make policy formulation,while sole proprietorship FDI has significant negative effect on innovation.Therefore,when formulating the investment policy,it should be combined with the local entrepreneurial situation.For the startups protected by local governments,try to avoid the introduction of a large number of sole proprietorship FDI,and formulate different policies for different industries,reducing the negative impact of sole proprietorship FDI on entrepreneurship.The innovation of this paper mainly include the following aspects.(1)This paper establishs the research paradigm of "behavior-environment-performance" and constructs a theoretical analysis framework for the impact of FDI on entrepreneurship and innovation,which helps to re-understand the motives,channels and influence effects of FDI spillover effects on China in the context of institutional reform.(2)This paper finds the existence of U-type relationship between FDI entry scale and entrepreneurship and innovation,and the relationship between FDI entry scale and entrepreneurship and innovation is regulated by the institutional environment.It describes the relationship between FDI entry scale and entrepreneurship and innovation,expands relevant research in this field,and provides new ideas for subsequent research;(3)This paper reveals that the relationship between FDI entry scale and entrepreneurship and innovation is regulated by FDI entry speed.The FDI entry speed weakens the U-shaped relationship between FDI entry scale and entrepreneurship,and enhances the U-shaped relationship between FDI entry scale and innovation.This helps the Chinese government to formulate a more appropriate "introduction" strategy and improve the level of domestic entrepreneurship and innovation.The research in this paper enriches and deepens the understanding of the FDI entry behavior of multinational corporations in the context of China's special system and its impact effect,and provides theory and experience support for China to further implement comprehensive reform and opening up,build a comprehensive open economic development system and formulate a reasonable open policy.