Research On The Relationship Between Foreign Direct Investment,technology Spillover And Enterprise Growth In Madagascar

In the 21st century,the trend of global economic integration is increasing,and the scale of capital flow between countries is also increasing.As one of the important driving forces of economic globalization,Foreign Direct Investment(FDI)has been widely concerned by the academic circles for its fundamental role in the construction of technological capacity and formation of core competitiveness of developing countries.For developing countries,attracting foreign capital can make up for the lack of funds in the process of economic development,and may promote the improvement of technological innovation level of domestic enterprises,thus forming the comprehensive competitive strength of enterprises.Along with the acceleration of foreign direct investment,developing countries how to effectively use the spillover effects of foreign direct investment,introduce advanced technology and make full use of the labor force,thus cultivating its enterprise independent innovation ability,is not only a developing country at the present stage to introduce foreign capital,technology innovation and development,important issues facing the more related to the domestic enterprises long-term development strategy of the construction of the development and growth ability.So far,researches on FDI mainly focus on the economic spillover effect of FDI on host countries,and seldom examine the impact of FDI on micro enterprises.For Madagascar,a developing country,foreign direct investment has brought a lot of external effects to its enterprise growth in recent years in terms of technology and skills transfer,trade network establishment,industrial upgrading and improvement of international market relations.Therefore,taking Malagasy enterprises as samples,it is of great theoretical and practical significance to actively study the technology spillover effect of foreign direct investment and its impact on the growth of domestic enterprises.In recent years,many research achievements have been made on technology spillover effects of FDI,but not all of them show positive correlation.In the past decade,developing countries have begun to reduce the proportion of foreign direct investment.As a result,many questions arise as to whether the actual impact and spillover effects of FDI are far from what is expected.Are spillovers sufficient to justify the need for subsidies and tax incentives in developing countries to attract foreign investors?Based on the previous research results,this paper delves into the actual impact of foreign direct investment on domestic enterprises in Madagascar.At the same time,will the external technology environment of individual industries affect the technology transfer effect?Based on the researching of literatures,this paper establishes the theoretical research framework of FDI,technology spillover and enterprise growth.There are mutual influence relations between FDI,technology spillover and enterprise growth,and technology spillover plays an intermediary role in the relationship between FDI and enterprise growth.Meanwhile,the proportion of foreign capital shares is added as a regulating variable between FDI and enterprise growth.The research hypothesis was tested by regression analysis.In the empirical research,this paper used substitution variables to examine the relationship between FDI,technology spillover and enterprise growth.Among them,FDI is independent variable,R&D spillover and labor force spillover are mediating variables,while the proportion of foreign capital shares is a moderating variable,and enterprise growth is a dependent variable.The empirical data of this study come from the embassy of the republic of Madagascar in the People's Republic of China(according to the requirements of the embassy,the data are confidential).According to studies conducted by Baron and Kenny(1986)and Wen(2004),this paper used data from Madagascar samples of foreign enterprises from 2014 to 2016 for regression analysis,including 1,268 observation values.At the same time,through constructing the mediating effect model,this paper examines the regulation effect of the proportion of foreign shares.Through empirical research,this paper reaches the following conclusions:1.The relationship between Foreign Direct Investment and enterprise growthForeign Direct Investment has a significant positive impact on business growth inMadagascar.Combining the situation of Madagascar,foreign investment is greatly influenced by political,during 2009,due to the affected by the political change in Madagascar,many foreign investors divestment from Madagascar,late as Madagascar has put forward the corresponding tax policy and foreign capital policy,foreign investors in Madagascar textile areas,construction areas,tourist areas,resources exploitation investment increasing,foreign direct investment has brought the demonstration effect,make the Madagascar to obtain advanced technology and knowledge,at the same time,foreign direct investment in the competitive force domestic firms to improve the production line and the corresponding level,this has allowed Madagascar to grow rapidly.2.The relationship between FDI and technology spilloverTwo dimension variable of technology spillovers of Foreign Direct Investment to do regression analysis respectively,the following conclusions:first,the Foreign Direct Investment has a positive influence on labor spillover significantly,showed that because of advanced technology and management experience of the foreign capital enterprise staff flow,Madagascar staff during the work in a foreign capital enterprise may accumulate relevant skills,the ascension of the human capital will lead to domestic enterprises,and promote better structure capital and relationship capital,comprehensive promotion of the intellectual capital of the domestic enterprises,improve the quality of talents in Madagascar.Second,foreign direct investment has a positive influence on R&D spillovers significantly,show that FDI brings new products,new technology and new organization mode has brought the host country enterprise technology,the advanced technology to a great extent,increasing the Madagascar directly enterprise's technical reserves,provide more opportunities for technology and market opportunities,create technology in domestic enterprise itself under the condition of limited knowledge,to learn,contact and the use ofmore technology resources.3.The relationship between technology spillover and enterprise growthThe regression results of the two dimensions of technology spillover and research and development spillover by enterprise growth show that both of them have significant positive effects on enterprise growth.This suggests that:on the one hand,Labour is the key resources of enterprise growth,Madagascar enterprise external access to new knowledgeand management experience to carry on the absorption and utilization,make the employee's labor skill level and management ability,technology with higher levels of the laborers can create more value for enterprises,to promote the enterprise to improve labor productivity.On the other hand,multinational companies bring advanced technology and provide Madagascar with advanced technology and information technology,so that the production efficiency of foreign enterprises in Madagascar can be improved,thus promoting their growth.In addition,high-tech foreign-funded enterprises have improved their market competitiveness,resulting in domestic enterprises being forced by the external market pressure to increase investment in research and development in order to improve their competitiveness and improve production efficiency,which in turn has promoted the rapid growth of domestic enterprises.4.The mediating effect of technology spillover and the moderating effect of equity governance structureThe research results on the impact of FDI on enterprise growth under the effect of technology spillover intermediary indicate that there are two mediating effects in this paper,namely,FDI,labor spillover and enterprise growth,and FDI,R&D spillover and enterprise growth.The analysis results of the mediating effect model further show that foreign direct investment plays a role in promoting the growth of enterprises,and it plays an indirect role in promoting the growth of enterprises by increasing the spillover of labor force and R&D.It suggests that the larger FDI inflow is,the greater Madagascar's input in digestion and absorption,and the technology spillover from technology introduction improves the corresponding independent innovation ability,and the larger economic spillover will be.In equity governance structure for moderating variable,respectively to investigate equity governance structure in the Labour overflow and R&D spillover between firm growth and adjustment,the results showed that:on the one hand,equity governance structure for overflow and enterprise growth is no significant relationship between labor regulation,along with the increasing foreign capital that flows in,Madagascar enterprises brain drain will not have big impact to the enterprise growth;On the other hand,equity structure governance has significant negative moderating effect between R&D spillover and enterprise growth.That is,the higher the proportion of foreign shares in the equity governance structure,the stronger the positive relationship between R&D spillover and enterprise growth.Instructions as the higher the proportion of foreign investment shares,resulting in Madagascar over-reliance on multinational company's technology,even copy the multinational technology procedures and the path,form the dependence of industrialization,suffer punishment,punishment and punishment cost,etc.,causing local enterprise core technology upgrading,technological innovation ability.