Research On The Impact Of Diplomatic Relations On Multinational Corporation Innovation

The report of the 20th National Congress of the Communist Party of China pointed out that we must adhere to science and technology as the primary productive force,talent as the primary resource,and innovation as the primary driving force.Since the reform and opening up,with high-quality products and low prices,China’s manufacturing has gone to the world,promoting the rapid development of China’s economy,and the GDP has exceeded the trillion mark,becoming the world’s second largest economy.However,compared with the huge scale of the economy,China’s innovation capacity has not reached the same height,and in many key areas and core technologies,China is still constrained by people,unable to achieve independent research and development,which has curbed the speed and space for further economic growth.In the process of innovation-driven development,not only the company’s own R&D strength plays an important role,but also the impact of diplomatic relations between countries on the innovation of Chinese enterprises cannot be underestimated.Since the 18 th National Congress of the Communist Party of China,the Party Central Committee with Comrade Xi Jinping as the core has led China’s foreign affairs to overcome difficulties and created a new situation in the diplomacy of major countries with Chinese characteristics.As of February 2023,the total number of countries with diplomatic relations with China has increased to 181,and partnerships have been established with more than 110 countries and regional organizations.Has improved diplomatic relations improved the innovation performance of our companies? And what factors regulate the relationship between the two? This deserves further investigation.Based on the existing research,combined with institutional theory and resource base theory,this paper selects the data of listed enterprises from 2008 to2020,and deeply discusses the impact of diplomatic relations on the innovation of multinational corporations,the influence mechanism,and the regulating effect of the property rights nature of enterprises and the characteristics of the host country on the impact.(2)As an active friendly relationship between countries,bilateral diplomatic relations can promote the improvement of the innovation performance of multinational companies by strengthening economic cooperation,promoting cultural exchanges,and alleviating corporate financing constraints;(3)Enterprises with different ownership properties and enterprises located in countries with different geographical locations are affected by foreign relations to a different extent.In the process of engaging in innovative activities,state-owned enterprises are more vulnerable to changes in foreign relations.From the perspective of host country characteristics,countries along the Belt and Road are more susceptible to changes in bilateral diplomatic relations,and other things being equal,the innovation performance of enterprises engaged in R&D and innovation activities in these countries is better.Based on the research conclusions,this paper further puts forward policy recommendations.