IFDI and Host Country Entrepreneurship:Mechanism Analysis based on the Division of Entrepreneurial Types
It is the internal demand of China's economic development in the new stage that use the international circulation to promote the domestic economic cycle,and improve the domestic economic vitality and technical level.From the perspective of entrepreneurship,this paper explores the impact of inward foreign direct investment on entrepreneurial activities in host countries,especially innovative entrepreneurship.In recent years,academia has paid increasing attention to the relationship between IFDI and host country entrepreneurial activities.However,the conclusions of existing research still controversial.On the one hand,scholars from a spillover perspective emphasize that the demonstration effect of IFDI,as well as supply chain linkages and employee mobility will bring positive spillover effects and promote the local entrepreneurial activities.On the other hand,scholars from the perspective of competition have found that the intensified competition caused by IFDI will have a significant negative effect on entrepreneurial activities in the host country,especially in developing countries.In fact,IFDI can affect the host country's entrepreneurial activities through a variety of positive spillover mechanisms,and there is also a complex intertwining of positive spillover and negative competition mechanisms.At the same time,different types of entrepreneurial activities also have fundamental differences in the source and nature of opportunities.Therefore,the impact of IFDI on different types of entrepreneurial activities may be fundamentally different.Based on the IFDI spillover theory and entrepreneurial type literature,this paper attempts to unravel the differences mechanism of IFDI on different types of entrepreneurial activities in the host country,and further analyzes the relationship between IFDI and innovative entrepreneurship.Specifically,the article proposes that IFDI will have a differential impact on different types of entrepreneurial activities,and this difference will be further highlighted under different levels of formal institutions.On the one hand,the market spillover effect of IFDI will increase the opportunities for imitative entrepreneurship,which help reduce entrepreneurial risks and make up for the constraints of the weak institutional environment of the host country.On the other hand,innovative entrepreneurship not only benefits from the IFDI knowledge spillover effect,which increases the overall knowledge stock and knowledge diversity of the host country,but also will be the main victim of the negative competitive effects of IFDI,requiring more comprehensive institutional guarantees.Further,for innovative entrepreneurship,the positive effect and the negative effect will ultimately depend on the ability and willingness of entrepreneurs in the host country to absorb and utilize knowledge spillovers(manifested as national R&D investment level and national property rights protection level),as well as their ability to resist potential competition(manifested as national financial development level and national entrepreneurial support level).The above theoretical hypothesis was tested using data from 59 countries from 2010 to 2018.The theoretical contributions of this paper are as follows:First,this paper emphasizes that the impact of IFDI on different types of entrepreneurial activities has different mechanisms,and further clarifies the institutional context in which different mechanisms play a role,which will help to quell existing research debates and contribute to the deepening of IFDI research.Second,this study identifies two conflicting mechanisms by which IFDI affects innovative entrepreneurship-knowledge spillover mechanism and competition mechanism,emphasizing that IFDI is not only affected by multiple knowledge,but also the main victim of negative competitive effects,and clarifies the situational conditions that strengthen or weaken the above two mechanisms.Thus,this study clearly reveals the path of IFDI's impact on innovative entrepreneurship,especially highlighting the high context-dependence of this effect.Third,by emphasize the knowledge spillover effect of IFDI,this study enriches the understanding of promote innovations in developing countries.
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