The Correlation Of FDI And Growth Of Enterprise

FDI has been the "patent" of developed countries for a long time. But sincethe 1960's, multinationals had emerged in developing countries that brokethe monopoly of multinational companies in developed countries. After a period ofdevelopment, multinationals in developing countries had a big growth. It is not astandard of international economics and development economics expected. Sowhat's the strength of multinational companies in developing countries to launchFDI? What will be the effects on enterprises? According to these backgrounds, Iissue the research problem.The paper concludes that modern enterprises pursue the growthmaximization, different enterprise corresponds the different goal. Therequirement for denotative growth promotes to implement the marketmultiplication strategy, production and manufacture FDI is the best way torealize this goal. The requirement for connotative growth promotes to seek theinnovation of technology and organization management. The paper concludesthat technology-seeking FDI has more effective effect on technological innovation;also this kind of FDI can acquire advanced experience of organizationalstructure and management system. So it is the best way to realize the goal ofconnotative growth.There is no related empirical research on the correlation of FDI and growthof enterprise in China. The paper chooses 150 listed companies as the sample. Weuse Heckman two-stage estimate to set up a model which can demonstrate thecorrelation. The results show that both production and manufacture FDI andtechnology-seeking FDI have positive effect on growth of enterprise, the latter has a bigger influence than the former, and along with the time passing, thepositive effect can be more obvious.