Abstract | At present, China’s economic development has entered a new normal. The resource constraints are tightening increasingly, labor costs are rising gradually and environmental carrying capacity is also close to the ceiling which leading to a sharp weakening of traditional advantage of attracting foreign capital. Therefore, the cultivation of new competitive advantage of attracting foreign capital is imminent. However, new competitive advantage is not from the preferential policy, but to create a stable, fair, transparent, legal and predictable business environment (Wang, 2017). What are the internal mechanisms of enhancing the ease of doing business as the new advantage of attracting foreign capital and technology in the developing countries? How strong is the real effect in China? And the new advantage of attracting foreign capital and technology is mainly form the reduction of institutional transaction cost (institutional innovation) in enhancing the ease of doing business, or the improvement of government service (service driven)?
However, few scholars have systematically and comprehensively answered the above questions. The existing researches are mainly based on the macro-level to empirically examine the effect of attracting foreign capital of enhancing the ease of doing business in some specific areas, such as Anyanwu (2012) and Bakieva (2017), or to empirically study the effect of attracting foreign capital of enhancing the ease of doing business in overall areas, such as Corcoran & Gillanders (2015) and Jovanovic & Jovanovic (2017). Therefore, the existing researches didn’t analyze theoretically the internal mechanisms of enhancing the ease of doing business as the new advantage of attracting foreign capital and technology, and also ignored the effect of attracting foreign technology, which is the focus of competition in attracting foreign capital of many countries, and the source of the new advantage of attracting foreign capital and technology. Meanwhile, the heterogeneity of the effect and its source of enhancing the ease of doing business as the new advantage of attracting foreign capital and technology were also ignored in the existing researches.
Therefore, in order to make up for the above gaps and answer the above questions, the effect and its source as well as their heterogeneity of enhancing the ease of doing business as the new advantage of attracting foreign capital and technology were analyzed in this paper, which combine China’s reality. Firstly, the conclusions of the theoretical analysis based on the micro perspective are as follows: in the developing countries, enhancing the ease of doing business has positive effect of attracting foreign capital and technology, and could attract more foreign technology; the positive effects of attracting foreign capital and technology were existed both in the paths of institutional innovation and service driven, which means the new competitive advantage mainly comes form institutional innovation. And the Chinese enterprise survey data have been adopted to verify the above theoretical conclusions. Further, based on the dimensions of source and destination of foreign capital, it is found that the positive effects of enhancing the ease of doing business as the new advantage of attracting foreign capital and technology which form Hong Kong, Macao Taiwan or in domestic coastal areas are respectively greater than other countries (areas) or in domestic inland areas, and the new competitive advantages mainly come form institutional innovation.
The results of this study can provide the theoretical and empirical evidences on the micro-level for enhancing the ease of doing business as the new competitive advantage of attracting foreign capital. Meanwhile, it also contains deeper policy implications for the conclusions of further analysis on the source of the new competitive advantage of attracting foreign capital and its heterogeneity based on the dimensions of source and destination of foreign capital. Specifically, as the new advantage of attracting foreign capital and technology, enhancing the ease of doing business should be based on the institutional innovation, and reform mode of government service. Besides, in order to maximize the new advantages of attracting foreign capital and technology, it is also necessary to rationalize the structures of source and destination of foreign capital in the process of enhancing the ease of doing business.
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