A Research On The Impact Of Government Support Towards Innovation Performance In Chinese OFDI Enterprises

In 2015,China’s Outward Foreign Direct Investment(OFDI)achieved a historic breakthrough,and foreign investment flows for the first time ranked second in the world,occupying the global share of 9.9%,over the Inflow of foreign capital for the first time.China has became a net exporter of capital and deserve international investment powers.The rapid growth of China’s Outward foreign investment can not be separated from the government’s policy support.At the national level,since 2001,when Chinese government wrote "go out" strategy into "economic and social development of the Tenth Five Year Plan"for the first time,many regional cooperation strategy have been launched.Especially in 2013,with "The Belt and Road strategy"which includes "Silk Road Economic Belt in twenty-first Century" and "maritime Silk Road" carried out,Chinese outward foreign investment has come into a new round of the climax;at the industry level,Chinese government launched the "guiding foreign investment industry directory" in 2006,clearly encourage foreign investment in some industries,and gave policy support and guidance for these industries;at the enterprise level,the OFDI companies have the opportunity to obtain additional government subsidies and preferential tax policies.According to the theories of foreign investment,one of the most important goals of developing countries’ foreign direct investment is to improve the level of innovation.The reverse investment theory based on the viewpoint of resources,believes that enterprises in developing countries which make foreign direct investments can obtain advanced technology resources so as to enhance its innovative level;while the institutional theory believes that the enterprises in developing countries make foreign investment in order to meet the strategic needs of the government,after the OFDI,they can get additional government support and subsidies which on the one hand give more innovation funds for the enterprise,on the other hand,may meet the goal of "seeking subsidies" and restrain the motivation of innovation.Then,whether the support and guidance form government at the industry level,and direct subsidies at the enterprise level raise the level of innovation in enterprises?Among different enterprises,what are the differences in the mechanism?Therefore,this article established the model between OFDI and enterprise innovation performance based on the view both from resource and institutional,focused on the support and policy of the government at both industry level and enterprise level,and analyzed the moderating effect of firm heterogeneity for the relationship between them.Using the 1998-2013 panel data of industrial enterprises,and making empirical analysis through the fixed effects model and the PSM regression model,this article draw the conclusions:(1)the OFDI in enterprise has a significant effect in enhancing innovation performance;(2)the government support for OFDI enterprises at industry level has a significant enhancement of the relationship between OFDI and innovation performance.It is to say that the industry guidance and support,has significant effect in OFDI enterprises attributable to these industries to improve innovation performance;(3)the moderate government subsidies have an enhancing moderating effect in the relationship between the OFDI and innovation performance,in other words,in the appropriate government subsidies range,other things equal,the greater the intensity of government subsidies is,the innovation performance in OFDI enterprises is higher;(4)because of heterogeneity in different enterprises,support at the industry level and the government subsidies at the enterprise level have obvious different moderating effects in the relationship between OFDI and innovation performance.Specifically,compared with state-owned enterprises,government support at industry level and modest subsidies at enterprise level have a more obvious enhancing moderating effect in the relationship between OFDI and innovation performance in non-soes;the lower degree of political relevance is,support at industry level and modest subsidies at enterprise level have a more obvious enhancing moderating effect in the relationship between OFDI and innovation performance;for the enterprises with backward technology,support at industry level and government subsidies at enterprise level have a weakening moderating effect in the relationship between OFDI and innovation performance,and for leading technology companies,support at industry level and government subsidies at enterprise level have an enhancing moderating effect in the relationship between OFDI and innovation performance.According to the research conclusions,this article puts forward the corresponding policy recommendations for the government to formulate the OFDI policy:(1)the government should continue to expand and improve the guidance of foreign investment industry,make full use of the promoting effect of government industry policy for the innovation performance in innovation performance of OFDI enterprises;(2)the government should give appropriate government subsidies to OFDI enterprises,to make full use of the promoting effect of modest subsidies in innovation performance of OFDI enterprises;(3)when making support policy,the government should make request for the innovation performance in state-owned enterprises and enterprises with higher levels of political connections to stimulate their innovation motivation.(4)the government should make set threshold for enterprises to get subsidies,such as the level of technical requirements,to guard against the phenomenon of "seeking subsidies".To solve the problems that the backward technology enterprises are "seeking subsidies",the government should give government subsidies to OFDI enterprise based on threshold conditions,and ensure that government subsidies can improve the level of enterprise innovation.