Entrepreneurship and Spillovers From Multinationals: Evidence From Chinese Private Firms

Posted: 18 May 2021

See all articles by Qing Liu

Qing Liu

Renmin University of China

Ruosi Lu

University of International Business and Economics (UIBE)

Chao Zhang

University of International Business and Economics (UIBE) - School of International Trade and Economics

Date Written: 2014

Abstract

Using nationwide survey data in China, we find evidence of positive FDI spillover effects via entrepreneurship. After controlling for a series of entrepreneur and firm attributes, our OLS estimates suggest that private firms run by entrepreneurs with MNE work experience outperform their counterparts run by entrepreneurs without MNE work experience. To deal with the potential endogeneity in the sense that inherently more capable entrepreneurs may self-select into MNEs before launching their own businesses, we use a nonparametric way, i.e., the propensity score matching (PSM) method, to identify the MNE “treatment” effect. The PSM estimates remain consistent with the OLS evidence, and the estimates are robust to different sensitivity analyses. We further find that private firms run by MNE-trained entrepreneurs do operate differently from their counterparts in both their global involvement and internal management, which are the underlying channels of the spillovers.

Keywords: Entrepreneurship, Multinational Enterprise, Spillovers, Propensity Score Matching

Suggested Citation

Liu, Qing and Lu, Ruosi and Zhang, Chao, Entrepreneurship and Spillovers From Multinationals: Evidence From Chinese Private Firms (2014). China Economic Review, Vol. 29, 2014, Available at SSRN: https://ssrn.com/abstract=3846315

Qing Liu (Contact Author)

Renmin University of China ( email )

Ruosi Lu

University of International Business and Economics (UIBE) ( email )

10, Huixin Dongjie
Changyang District
Beijing, Beijing 100029
China

Chao Zhang

University of International Business and Economics (UIBE) - School of International Trade and Economics ( email )

10 East Huixin Street
Chaouang District
Beijing, 100029
China

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