Foreign Ownership,Returnee Executives And R&D Investment

Since the implementation of reform and opening up in 1978,China has attracted a large number of foreign capital and foreign investment by relying on abundant labor resources,low raw material prices and huge consumer market,which has injected new impetus into the development of China ’s manufacturing industry.Nowadays,China has become one of the world ’s largest manufacturing countries,occupying a huge market share in the global manufacturing industry.However,with the deepening of reform and opening up and the rapid development of the manufacturing industry,China ’s labor costs and raw material price advantages have gradually weakened,low-end overcapacity,weak high-end manufacturing,and unreasonable industrial structure have become increasingly serious,which has seriously restricted the high-quality development of the manufacturing industry.In addition,some countries led by the United States have adopted technical blockade measures to implement monopoly control over key equipment and core components required by some industries in China,aiming to curb the development of China ’s manufacturing industry.In order to cope with the new challenges brought by the changes of internal and external environment and realize the independent mastery of core technologies in key fields,China must fully mobilize various resources and factors inside and outside to jointly promote the innovation,transformation and upgrading of manufacturing industry.Overseas capital and talent resources are an important part of external resources,which have important strategic value for improving the level of Research and development(R&D)investment,technological innovation ability and high-quality development of China ’s manufacturing industry.Based on technological innovation theory,principal-agent theory,resource dependence theory,high-level echelon theory and signal transmission theory,this paper takes China ’s Shanghai and Shenzhen A-share manufacturing listed companies from 2011 to 2020 as sample data,and empirically studies the impact of foreign ownership on manufacturing R&D investment and the mechanism of returnee executives in it from a micro perspective.The study finds that foreign ownership has significantly promoted the improvement of R&D investment level of listed manufacturing companies in China,and returnee executives have played a significant mediating role between foreign ownership and the improvement of R&D investment level in manufacturing industry.Heterogeneity analysis shows that in non-stateowned enterprises,high-tech industries and the eastern region,foreign ownership has a more significant impact on R&D investment.Through a series of robustness and endogeneity test methods such as substitution variable method,propensity score matching method and instrumental variable method,the above conclusions are still valid after overcoming the problems of sample selection bias,missing variables and endogeneity.Further research shows that the mediating effect of returnee executives is regulated by corporate risk-taking and agency cost respectively.The higher the risk-taking ability and agency cost,the more significant the mediating effect of returnee executives.The analysis of economic consequences shows that foreign ownership in manufacturing can ultimately improve total factor productivity by increasing R & D investment.The conclusion of this paper provides timely data support for the decision-making of ’ promoting high-level opening up and rationally reducing the negative list of foreign investment access ’ proposed by the ’ 20 th National Congress Report ’.At the same time,these conclusions also provide important enlightenment for the government to improve the policy of attracting foreign investment and returnee executives in the manufacturing industry and optimize the corporate governance structure.