Research On The Impact Of Chinese Enterprises' OFDI On Technological Innovation

China's economy has accomplished the transition from high-speed growth to high-quality development.At this stage,China needs to take technological innovation as the fundamental driving force for economic development.Both domestic R&D and international technology spillovers can help improve a country's technological innovation.High-level opening-up may promote the high-quality development of the economy.To promote innovation and development through opening-up and to strengthen innovation cooperation with the world is in line with high-quality development.In the open global economy,China has gained sustainable development of OFDI.OFDI can provide an important way for China's enterprises to participate in international economic and technological cooperation and competition,and it can provide an important channel for enterprises to use both domestic and international markets and resources.Besides,OFDI can help promote technological innovation of enterprises.This paper aims to analysis the impact of Chinese OFDI on technological innovation and try to find answers to the following questions: Does OFDI affect technological innovation?What impact will it have on technological innovation? What is the impact mechanism of OFDI on technological innovation? Are there any differences in the impact of OFDI on technological innovation between different enterprises?In order to answer these questions,this paper has carried out the following research.Firstly,this paper conducts the theoretical analysis.This paper uses the developing countries OFDI theory,knowledge spillover theory,and “new new” trade theory to analyze the overseas investment behavior of enterprises.Then this paper analyzes the impact mechanism of OFDI on technological innovation.It can be divided into two periods.Overseas subsidiaries join the global innovation network to obtain advanced knowledge information,and then the parent enterprises absorb,transform and disseminate the knowledge.Secondly,this paper tries to measure the impact of OFDI on technological innovation.Based on the developments about the OFDI and technological innovation of enterprises,this paper selects listed manufacturing enterprises in 2008-2015 as the research samples.After matching“the list of outward foreign investment enterprises” with the database of listed enterprises,this paper adopts difference-indifference approach based on the propensity score matching(PSM-DID)to measure the impact of OFDI on technological innovation.Thirdly,this paper analyzes the influencing mechanism.By adopting mediation model,with R&D investment,overseas business return,and corporate returns as potential mediation variables,this paper conducts an empirical test on the mechanism of the OFDI's impact on technological innovation.Fourthly,this paper analyzes the impact among different enterprises.Based on the characteristics of enterprises,industry classification,and regional marketization,this paper divides the samples into different groups and conducts empirical tests for each sub-sample.Therefore,this paper provides policy recommendations for the rational development of OFDI and the positive influence of OFDI from both the government and enterprise perspective.Based on the above analysis,this paper finds:Firstly,China's international position in global investment has increased significantly,and the enterprises' core technological innovation capabilities need to be improved.By the end of2018,China has maintained the top three in the global OFDI flow ranking for seven years,and China's has maintained the top three in the global OFDI stock ranking for two years.In recent years,as some countries tighten their foreign investment policies and China impose restrictions on irrational overseas investment,China has entered a stage of low-speed and stable growth in OFDI.China's Global Innovation Index ranks has been rising for four years and China is the only middle-income economy in the world's top 30.The invention patents,which are more technical than other kinds of patents,account a small proportion in the total patent volume.This indicates that China still lacks in core technology and needs to improve the proportion of highquality core patents.Secondly,OFDI can promote technological innovation,and the promotion is sustainable.After OFDI,the number of invention patents granted has increased significantly.According to the dynamic test results,in the first,second,and third years after OFDI,the innovation level of the enterprises shows a continuous upward trend.Then this paper conducts a series of robustness tests including replacing the research with alternative samples,alternative variables,and alternative research methods,and the results show that the incentive effect of OFDI on technological innovation is relatively stable.Thirdly,OFDI can affect technological innovation by improving the level of R&D input,overseas business return and operating return,but there are certain differences when enterprises invest in different regions.When enterprises invest in regions with a high level of technological innovation or regions with a larger cultural gap with China,R&D input,overseas business return and operating return will work as intermediary variables.When enterprises invest in regions with a lower level of innovation or with a smaller cultural gap with China,OFDI mainly affects the overseas business return and operating return.Overall,the innovation incentive effect brought by OFDI is higher in regions with higher levels of innovation or regions with a larger cultural gap with China.Fourthly,the impact of OFDI on technological innovation varies among different enterprises due to their different enterprise characteristics,industry classification,and regional marketization.From a micro perspective,OFDI has a more significant impact on technological innovation when enterprises have higher productivity,stronger absorptive capacity,or faster growth.OFDI could promote the technological innovation of both state-owned enterprises and non-state-owned enterprises.OFDI has a more obvious impact on state-owned enterprises' technological innovation.From industry classification perspective,the impact of OFDI in hightech enterprises on technological innovation is more significant than on other enterprises.From marketization perspective,for enterprises from regions with a high degree of marketization,OFDI has a stronger impact on their technological innovation.Based on these,this paper proposes the following recommendations.The government should promote the internationalization of enterprises and create a good investment environment for enterprises.Besides,the government should further promote the innovationdriven development strategy,strengthen the concept of promoting innovation with openness,and improve the market economy system to create a good environment for innovation.For enterprises,they should formulate precise and differentiated upgrade measures based on their own characteristics to strengthen the positive influence of OFDI.State-owned enterprises should strengthen the innovation concept and private enterprises should improve the R&D efficiency.Besides,they should arrange overseas investment reasonably and actively integrate into the global innovation network.