Innovation, Firm Productivity, And Choice Of Modes Of Entry Into International Markets

The pervasiveness of economic globalization and trade liberalization promotes the world optimal allocation of production factors and the world strategy layout of the value chain, subtly changing political and economic landscape in the world. In order to circumvent the trade barriers, obtain strategic resources, acquire generic technology, optimize product structure, expand operating earnings, reshape market pattern, etc., more and more companies have to go abroad, and go towards the world market, and carry out international operation, which is in accord with the trend of political multi-polarization and economic globalization in the world today, meanwhile, and promote enterprise branding, capitalization and high-end and enhance national competitiveness, influence and attractions, becoming a beautiful scenery line on the contemporary Chinese enterprises internationalization stage.International market entry mode research, beginning with international investment theories, becomes more and more perfect by continual development and enrichment. Especially new new trade theory, focusing on the enterprise heterogeneity, comes into being to open up a broader space for development field and innovation area for the study. New new trade theory suggests that the enterprises with only high productivity can enter the international market and carry out international operation, and the enterprise with lower productivity can only serve the domestic market, enterprises with the lowest productivity have to exit the domestic market. For a long time, in China enterprise independent innovation ability is low, and the overall level of labor productivity is not high, and the internationalization development experience is superficial, and all lack of a clear internationalization strategy. Choosing an appropriate international market entry mode is a key of whether enterprise success towards the international market and carry out international operation.From the perspective of firm heterogeneity, the article links the innovation, enterprise productivity and international market entry mode choice, systematically studies the inner mechanism between these three interactions and carries out tests with the enterprise micro data. Started by the literature review, This article reviews and comments research progress both at home and abroad of the enterprise internationalization theory and new new trade theory, and lays stress on the relationships of the innovation, firm productivity and international market entry mode selection (chapter2).First of all, the paper analyze the enterprise heterogeneity theory, and discuss the connotation of enterprise heterogeneity and universality in international trade, and describe heterogeneous enterprise international market entry mode choice in detail under the HMY framework, so firm can choose contract mode in addition to export model and FDI mode, and dynamic factors should be considered, and innovation factors will include (chapter3).Second, from the perspective of the enterprise heterogeneity we respectively discusses the interactive relationship of innovation, firm productivity and firm international market entry mode, fully considering the actual situation of enterprise internationalization, such as indirect export, innovation heterogeneity (different innovation degree and different innovation type), joint venture, export platform FDI, and so on (chapter4, chapter5). Then, taking export model for example, we use the conclusions obtained from the enterprise microscopic data above to make empirical analysis (chapter6). Finally, we come to the conclusion from each chapter (chapter7).In this paper, the main conclusion is that the enterprises must choose the model which is in accordance with the productivity when entering international market. From the perspective of heterogeneity, there are interactive relationships between innovation, enterprise productivity and international market entry mode. Considering transport cost is zero and the innovation performance heterogeneity, innovation plays an important role in the process of selecting the export model to enter international market. Considering the joint operation and export platform FDI mode, innovation has still significantly impact for enterprises to choose investment mode to enter the international market. When the enterprise productivity remained unchanged or maintaining a constant growth rate, companies choose the export model or investment mode to enter the international market; when productivity keeps random fluctuations, the export model is no longer the optimal mode, and firm will eventually choose investment mode to enter the international market. Innovation can improve the level of enterprise productivity, shorten the gap of productivity, reduce the waiting time before entering the international market, promote the enterprises to choose the suitable model to enter the international market, and to receive the internationalization of higher investment returns.The main reason for enterprises choosing the international market entry mode is the productivity relative level. For enterprises, enterprises should continuously innovate, and strive to improve innovation performance, and improve enterprise international operation level. From a global perspective, the government should improve the enterprise innovation performance, and try to build technology innovation system, enterprise as the main body, market oriented, industry-university-research combination and pay more attention to enterprise synergy innovation ability, and reduce the government subsidies, and continuously reduce the enterprise cost, and gradually expand enterprise scale, and improve enterprise productivity level and reduce government subsidies for the enterprise, and establish government subsidies dynamic monitoring incentive mechanism and innovation stimulation platform, and by tax incentives, feedback and cumulative evaluation improve the enthusiasm of enterprises to carry out technical innovation, and strengthen domestic infrastructure construction, and comprehensively clean up all kinds of administrative fees, and reduce transportation market entry costs, export fixed cost and export transportation cost, and strengthen international trade cooperation and communication, and simplify and coordinate all kinds of trade program at home and abroad, and promote the benign interaction by eliminating blind spots, and plugging up loopholes in information, and strengthening information feedback information measures.