Does FDI Boost City Entrepreneurship?The Mechanisms and Empirical Evidence from Prefecture Cities in China
Promoting urban entrepreneurial activities is an effective way to boost economic growth,optimize resource allocation and pro-mote social progress.Foreign direct investment(FDI)is an important factor influencing entrepreneurial activity.This paper empirically analyzes the impact of FDI on urban entrepreneurship and its mechanisms using fixed-effects models and instrumental variable methods based on data on newly founded enterprises from the State Administration for Market Regulation(SAMR)and matched data from China City Statistical Yearbook.The results show that①FDI can promote the increase of entrepreneurial activity in cities.②Based on the find-ings of replacing the core explanatory variables,transforming the sample intervals,eliminating the cities in the provinces with the high-est inward FDI,and the IV-2SLS and system-GMM methods,the impact of FDI on urban entrepreneurship is robust.③The heterogene-ity analysis shows that FDI significantly promotes high urbanization level,high financial development level and industrial structure up-grading of urban entrepreneurship.④Mechanism analysis shows that FDI can enhance urban entrepreneurial activity through demand creation effect,technological innovation effect and human capital effect.This study has enriched the relevant literature on FDI and urban entrepreneurship research,and has implications for further promoting the opening-up policy and high-quality urban development.
Entrepreneurial activityForeign direct investmentDemand creationTechnological innovationHuman capital
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