Research On The Impact Of China OFDI On Home Country Entrepreneurship

With the continuous deepening of the process of opening to the outside world,China’s OFDI has made remarkable achievements,and become a large country for foreign investment.As one of the important ways to participate in international economic cooperation,OFDI is a key channel for China to optimize resource allocation and obtain advanced technical knowledge and market resources.The impact of its development on entrepreneurship in its home country can’t be ignored.Institutional environment is the key factor affecting "resource allocation,knowledge spillover and talent flow".The superior institutional environment of the home country reduces the uncertainty risk in the process of technological knowledge and resource return,and promotes the absorption,utilization,diffusion and re innovation of technological knowledge,so as to realize the strong support for the whole process of entrepreneurship.So,this paper introduces the institutional environment into the research of China’s OFDI and home country regional entrepreneurship,and deeply explores the action mechanism of OFDI on entrepreneurship under the influence of institutional environment,so as to expand the framework of entrepreneurship research and provide the basis for the government to formulate relevant policies.Firstly,on the basis of combing the literature and reviewing the relevant theories,it is pointed out that the impact effect of OFDI on regional entrepreneurship in home countries mainly comes from reverse technology spillover effect,structure effect and personnel mobility effect;It further expounds that the institutional environment plays a threshold effect in this process.Secondly,it analyzes the development of OFDI and entrepreneurship in China and the relationship of them.Then,based on the data of China’s 30 provinces from 2003 to 2018,using the fixed effect panel regression model and threshold model to explore the impact of China OFDI on regional entrepreneurship in the home country and the role of institutional environment to China OFDI affecting regional entrepreneurship in the home country.The results show that OFDI plays a positive role in promoting regional entrepreneurship;However,the impact of OFDI on entrepreneurial activities is different in different regions.OFDI in the eastern region can significantly promote regional entrepreneurship,while OFDI in the central and western regions has no significant impact on regional entrepreneurship,indicating that there are regional differences in the impact of OFDI on regional entrepreneurship in the home country,suggesting that the exertion of China’s OFDI’s home country entrepreneurial effect may be restricted by the regional institutional environment.Further research found that the formal and informal institutional environment can positively regulate the relationship between China’s OFDI and home country regional entrepreneurship,that is,the better the regional formal and informal institutional environment,the more conducive to give play to the positive promotion effect of OFDI on home country regional entrepreneurship.Further study on the nonlinear mechanism of China OFDI’s impact on home country regional entrepreneurship shows that both formal and informal institutional environments have a significant single threshold effect on China OFDI’s home country regional entrepreneurship effect,that is,under different levels of institutional environment,the impact of OFDI on home country regional entrepreneurship is nonlinear.With the rising level of institutional environment,OFDI will continue to enhance its role in promoting regional entrepreneurship in the home country.Finally,based on the relevant conclusions,the suggestions put forward in this paper are to continue to adhere to and deepen the "going out" strategy,and scientifically guide domestic enterprises to make overseas investment;Note: to rebuild the institutional environment,optimize the domestic institutional environment,especially the improvement of the informal institutional environment,and create a good domestic environment for the development of OFDI and the play of the reverse spillover effect,so as to promote the entrepreneurial development of the home country;Regional development policies are differentiated,differentiated development policy strategies are formulated according to local conditions,and regional development is coordinated to give full play to OFDI’s reverse entrepreneurship effect.