IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v164y2021ics0040162520313354.html
   My bibliography  Save this article

Returnee policies in China: Does a strategy of alleviating the financing difficulty of returnee firms promote innovation?

Author

Listed:
  • Zhang, Chao
  • Guan, Jiancheng

Abstract

The role of returnee entrepreneurs is an alternative mechanism in stimulating innovation in Chinese firms. However, after years of living abroad, returnee entrepreneurs encounter difficulty in financing due to the lack of local connections. Therefore, creating a resource-munificent context to alleviate the above difficulty becomes an emerging strategy of returnee policies. With this study, we try to explain whether and how such kind of policies promote innovation. By drawing on panelized data from 30,890 firm-year observations in the Zhongguancun Science Park, and based on a causal mediation analysis framework, this study presents a comprehensive view of relationships between returnee policies, corporation financing, and innovation performance. Our findings reveal that the policies promote innovation through the mediation effect of corporate financing, and the policies moderates the promotion effect of corporate financing on innovation performance. The study also offers evidence-based implications for policymakers and has practical meaning for returnee entrepreneurs.

Suggested Citation

  • Zhang, Chao & Guan, Jiancheng, 2021. "Returnee policies in China: Does a strategy of alleviating the financing difficulty of returnee firms promote innovation?," Technological Forecasting and Social Change, Elsevier, vol. 164(C).
    • Handle: RePEc:eee:tefoso:v:164:y:2021:i:c:s0040162520313354
    DOI: 10.1016/j.techfore.2020.120509
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162520313354
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2020.120509?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Crown, Daniel & Faggian, Alessandra & Corcoran, Jonathan, 2020. "Foreign-Born graduates and innovation: Evidence from an Australian skilled visa program✰,✰✰,★,★★," Research Policy, Elsevier, vol. 49(9).
    2. Xiaohui Liu & Mike Wright & Igor Filatotchev & Ou Dai & Jiangyong Lu, 2010. "Human mobility and international knowledge spillovers : evidence from high-tech small and medium enterprises in an emerging market," Post-Print hal-02312635, HAL.
    3. Bertoli, Simone & Dequiedt, Vianney & Zenou, Yves, 2016. "Can selective immigration policies reduce migrants' quality?," Journal of Development Economics, Elsevier, vol. 119(C), pages 100-109.
    4. Tan, Justin, 2006. "Growth of industry clusters and innovation: Lessons from Beijing Zhongguancun Science Park," Journal of Business Venturing, Elsevier, vol. 21(6), pages 827-850, November.
    5. Antonelli, Cristiano & Crespi, Francesco, 2013. "The "Matthew effect" in R&D public subsidies: The Italian evidence," Technological Forecasting and Social Change, Elsevier, vol. 80(8), pages 1523-1534.
    6. Imai, Kosuke & Keele, Luke & Tingley, Dustin & Yamamoto, Teppei, 2011. "Unpacking the Black Box of Causality: Learning about Causal Mechanisms from Experimental and Observational Studies," American Political Science Review, Cambridge University Press, vol. 105(4), pages 765-789, November.
    7. Thorsten Beck & Ross Levine & Alexey Levkov, 2010. "Big Bad Banks? The Winners and Losers from Bank Deregulation in the United States," Journal of Finance, American Finance Association, vol. 65(5), pages 1637-1667, October.
    8. Charles J. Hadlock & Christopher M. James, 2002. "Do Banks Provide Financial Slack?," Journal of Finance, American Finance Association, vol. 57(3), pages 1383-1419, June.
    9. Song, Malin & Ai, Hongshan & Li, Xie, 2015. "Political connections, financing constraints, and the optimization of innovation efficiency among China's private enterprises," Technological Forecasting and Social Change, Elsevier, vol. 92(C), pages 290-299.
    10. Filatotchev, Igor & Liu, Xiaohui & Lu, Jiangyong & Wright, Mike, 2011. "Knowledge spillovers through human mobility across national borders: Evidence from Zhongguancun Science Park in China," Research Policy, Elsevier, vol. 40(3), pages 453-462, April.
    11. Cole, Rebel & Cumming, Douglas & Li, Dan, 2016. "Do banks or VCs spur small firm growth?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 41(C), pages 60-72.
    12. Julian Atanassov, 2016. "Arm’s Length Financing and Innovation: Evidence from Publicly Traded Firms," Management Science, INFORMS, vol. 62(1), pages 128-155, January.
    13. Julien Jourdan & Ilze Kivleniece, 2017. "Too Much of a Good Thing? The Dual Effect of Public Sponsorship on Organizational Performance," Post-Print hal-01488178, HAL.
    14. repec:zbw:bofrdp:2013_002 is not listed on IDEAS
    15. Yu, Feifei & Guo, Yue & Le-Nguyen, Khuong & Barnes, Stuart J. & Zhang, Weiting, 2016. "The impact of government subsidies and enterprises’ R&D investment: A panel data study from renewable energy in China," Energy Policy, Elsevier, vol. 89(C), pages 106-113.
    16. Fu, Xialoan & Hou, Jun & Sanfilippo, Marco, 2017. "Highly skilled returnees and the internationalization of EMNEs: Firm level evidence from China," International Business Review, Elsevier, vol. 26(3), pages 579-591.
    17. Marino, Marianna & Lhuillery, Stephane & Parrotta, Pierpaolo & Sala, Davide, 2016. "Additionality or crowding-out? An overall evaluation of public R&D subsidy on private R&D expenditure," Research Policy, Elsevier, vol. 45(9), pages 1715-1730.
    18. Escribano, Alvaro & Fosfuri, Andrea & Tribó, Josep A., 2009. "Managing external knowledge flows: The moderating role of absorptive capacity," Research Policy, Elsevier, vol. 38(1), pages 96-105, February.
    19. Neville, François & Orser, Barbara & Riding, Allan & Jung, Owen, 2014. "Do young firms owned by recent immigrants outperform other young firms?," Journal of Business Venturing, Elsevier, vol. 29(1), pages 55-71.
    20. Sule Alan & Seda Ertac & Ipek Mumcu, 2018. "Gender Stereotypes in the Classroom and Effects on Achievement," The Review of Economics and Statistics, MIT Press, vol. 100(5), pages 876-890, December.
    21. Du, Jun & Mickiewicz, Tomasz, 2016. "Subsidies, rent seeking and performance: Being young, small or private in China," Journal of Business Venturing, Elsevier, vol. 31(1), pages 22-38.
    22. Li, Hongbin & Meng, Lingsheng & Wang, Qian & Zhou, Li-An, 2008. "Political connections, financing and firm performance: Evidence from Chinese private firms," Journal of Development Economics, Elsevier, vol. 87(2), pages 283-299, October.
    23. Kathleen M. Eisenhardt & Jeffrey A. Martin, 2000. "Dynamic capabilities: what are they?," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1105-1121, October.
    24. Gao, Yanyan & Zang, Leizhen & Roth, Antoine & Wang, Puqu, 2017. "Does democracy cause innovation? An empirical test of the popper hypothesis," Research Policy, Elsevier, vol. 46(7), pages 1272-1283.
    25. Qin, Fei & Wright, Mike & Gao, Jian, 2017. "Are ‘sea turtles’ slower? Returnee entrepreneurs, venture resources and speed of entrepreneurial entry," Journal of Business Venturing, Elsevier, vol. 32(6), pages 694-706.
    26. Petra Moser & Alessandra Voena, 2012. "Compulsory Licensing: Evidence from the Trading with the Enemy Act," American Economic Review, American Economic Association, vol. 102(1), pages 396-427, February.
    27. Takalo, Tuomas & Tanayama, Tanja & Toivanen, Otto, 2013. "Market failures and the additionality effects of public support to private R&D: Theory and empirical implications," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 634-642.
    28. Boeing, Philipp, 2016. "The allocation and effectiveness of China’s R&D subsidies - Evidence from listed firms," Research Policy, Elsevier, vol. 45(9), pages 1774-1789.
    29. Tingley, Dustin & Yamamoto, Teppei & Hirose, Kentaro & Keele, Luke & Imai, Kosuke, 2014. "mediation: R Package for Causal Mediation Analysis," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 59(i05).
    30. Daniel Erian Armanios & Charles E. Eesley & Jizhen Li & Kathleen M. Eisenhardt, 2017. "How entrepreneurs leverage institutional intermediaries in emerging economies to acquire public resources," Strategic Management Journal, Wiley Blackwell, vol. 38(7), pages 1373-1390, July.
    31. Guariglia, Alessandra & Liu, Pei, 2014. "To what extent do financing constraints affect Chinese firms' innovation activities?," International Review of Financial Analysis, Elsevier, vol. 36(C), pages 223-240.
    32. José Martí & Anita Quas, 2018. "A beacon in the night: government certification of SMEs towards banks," Small Business Economics, Springer, vol. 50(2), pages 397-413, February.
    33. Prithwiraj Choudhury, 2016. "Return migration and geography of innovation in MNEs: a natural experiment of knowledge production by local workers reporting to return migrants," Journal of Economic Geography, Oxford University Press, vol. 16(3), pages 585-610.
    34. Xiaohui Liu & Jiangyong Lu & Seong-jin Choi, 2014. "Bridging Knowledge Gaps: Returnees and Reverse Knowledge Spillovers from Chinese Local Firms to Foreign Firms," Management International Review, Springer, vol. 54(2), pages 253-276, April.
    35. Xiaohui Liu & Jiangyong Lu & Igor Filatotchev & Trevor Buck & Mike Wright, 2010. "Returnee entrepreneurs, knowledge spillovers and innovation in high-tech firms in emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(7), pages 1183-1197, September.
    36. Galia, Fabrice & Legros, Diego, 2004. "Complementarities between obstacles to innovation: evidence from France," Research Policy, Elsevier, vol. 33(8), pages 1185-1199, October.
    37. Dai, Ou & Liu, Xiaohui, 2009. "Returnee entrepreneurs and firm performance in Chinese high-technology industries," International Business Review, Elsevier, vol. 18(4), pages 373-386, August.
    38. Kenney, Martin & Breznitz, Dan & Murphree, Michael, 2013. "Coming back home after the sun rises: Returnee entrepreneurs and growth of high tech industries," Research Policy, Elsevier, vol. 42(2), pages 391-407.
    39. David G. Sirmon & Michael A. Hitt, 2009. "Contingencies within dynamic managerial capabilities: interdependent effects of resource investment and deployment on firm performance," Strategic Management Journal, Wiley Blackwell, vol. 30(13), pages 1375-1394, December.
    40. Raven, Rob P.J.M., 2006. "Towards alternative trajectories? Reconfigurations in the Dutch electricity regime," Research Policy, Elsevier, vol. 35(4), pages 581-595, May.
    41. John Boatright, 2009. "Rent Seeking in a Market with Morality: Solving a Puzzle About Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 88(4), pages 541-552, October.
    42. Tang, Zhi & Tang, Jintong, 2012. "Stakeholder–firm power difference, stakeholders' CSR orientation, and SMEs' environmental performance in China," Journal of Business Venturing, Elsevier, vol. 27(4), pages 436-455.
    43. Li, Feng & Miao, Yajun & Yang, Chenchen, 2015. "How do alumni faculty behave in research collaboration? An analysis of Chang Jiang Scholars in China," Research Policy, Elsevier, vol. 44(2), pages 438-450.
    44. Zhao, Zhenyue & Bu, Yi & Kang, Lele & Min, Chao & Bian, Yiyang & Tang, Li & Li, Jiang, 2020. "An investigation of the relationship between scientists’ mobility to/from China and their research performance," Journal of Informetrics, Elsevier, vol. 14(2).
    45. Michelle Rogan & Marie Louise Mors, 2014. "A Network Perspective on Individual-Level Ambidexterity in Organizations," Organization Science, INFORMS, vol. 25(6), pages 1860-1877, December.
    46. Majumdar, Sumit K., 2016. "Debt and communications technology diffusion: Retrospective evidence," Research Policy, Elsevier, vol. 45(2), pages 458-474.
    47. Guan, JianCheng & Yam, Richard C.M., 2015. "Effects of government financial incentives on firms’ innovation performance in China: Evidences from Beijing in the 1990s," Research Policy, Elsevier, vol. 44(1), pages 273-282.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qing Yin & Delu Wang & Yadong Wang, 2023. "Serial Mediation Model Linking Returnee Entrepreneurship Education and Green Returnee Entrepreneurial Behavior: An Analysis of Environmental Improvement," Sustainability, MDPI, vol. 15(19), pages 1-15, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Qin Han & Jennifer E Jennings & Runjuan Liu & P Devereaux Jennings, 2019. "Going home and helping out? Returnees as propagators of CSR in an emerging economy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(6), pages 857-872, August.
    2. Mai, Nhat Chi, 2020. "Unpacking the process of overseas knowledge recontextualisation in returnee entrepreneurship - a learning perspective : a study of returnee entrepreneurs in Vietnam," OSF Preprints y5psh, Center for Open Science.
    3. Mreji, Pamela & Barnard, Helena, 2021. "The micro-foundations of the returnee liability: The interpersonal challenges of returnee entrepreneurs in Kenya," Journal of International Management, Elsevier, vol. 27(2).
    4. Yingjie Hao & Congcong Fan & Yunguang Long & Jieyi Pan, 2019. "The role of returnee executives in improving green innovation performance of Chinese manufacturing enterprises: Implications for sustainable development strategy," Business Strategy and the Environment, Wiley Blackwell, vol. 28(5), pages 804-818, July.
    5. Shen, Rui & Guo, Hai & Ma, Hongjia, 2023. "How do entrepreneurs' cross-cultural experiences contribute to entrepreneurial ecosystem performance?," Journal of World Business, Elsevier, vol. 58(2).
    6. Zhe Cao & Xianwei Shi, 2021. "A systematic literature review of entrepreneurial ecosystems in advanced and emerging economies," Small Business Economics, Springer, vol. 57(1), pages 75-110, June.
    7. Anthony Brown & Royston Meriton & Timothy Devinney & Mario Kafouros & Flor Silvestre Gerardo & Rajinder Bhandal, 2021. "Migrant human and political capitals value in entrepreneur enterprise performance. A comparative study of four emerging markets," International Entrepreneurship and Management Journal, Springer, vol. 17(2), pages 665-692, June.
    8. Yuefang Si & Yi Zhang & Tangwei Teng, 2021. "R&D internationalization and innovation performance of Chinese enterprises: The mediating role of returnees and foreign professionals," Growth and Change, Wiley Blackwell, vol. 52(4), pages 2194-2212, December.
    9. Li, Haiyan, 2020. "Role of overseas ethnic and non-ethnic ties and firm activity in the home country in the internationalization of returnee entrepreneurial firms," Journal of International Management, Elsevier, vol. 26(1).
    10. Lin, Daomi & Zheng, Wei & Lu, Jiangyong & Liu, Xiaohui & Wright, Mike, 2019. "Forgotten or not? Home country embeddedness and returnee entrepreneurship," Journal of World Business, Elsevier, vol. 54(1), pages 1-13.
    11. Qin, Fei & Wright, Mike & Gao, Jian, 2017. "Are ‘sea turtles’ slower? Returnee entrepreneurs, venture resources and speed of entrepreneurial entry," Journal of Business Venturing, Elsevier, vol. 32(6), pages 694-706.
    12. Dai, Yunhao & Chao, Yang & Wang, Li, 2021. "The brain gain of CFOs in China: The case of analyst forecasts," International Review of Financial Analysis, Elsevier, vol. 75(C).
    13. Lin, Jingyi & Plechero, Monica, 2019. "Global innovation networks for Chinese high tech small and medium enterprises: the supportive role of highly skilled migrants and returnees," Papers in Innovation Studies 2019/5, Lund University, CIRCLE - Centre for Innovation Research.
    14. Wang, Xiaozhen & Zou, Honghui, 2018. "Study on the effect of wind power industry policy types on the innovation performance of different ownership enterprises: Evidence from China," Energy Policy, Elsevier, vol. 122(C), pages 241-252.
    15. Yi, Lingfeng & Wang, Yue & Upadhaya, Bedanand & Zhao, Sijia & Yin, Yishuai, 2021. "Knowledge spillover, knowledge management capabilities, and innovation among returnee entrepreneurial firms in emerging markets: Does entrepreneurial ecosystem matter?," Journal of Business Research, Elsevier, vol. 130(C), pages 283-294.
    16. Li Zhou & Maris Farquharson & Thomas Wing Yan Man, 2016. "Human Capital of Returnee Entrepreneurs: A Case Study in China," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 24(04), pages 391-418, December.
    17. Gao, Yuchen & Hu, Yimei & Liu, Xielin & Zhang, Huanren, 2021. "Can public R&D subsidy facilitate firms’ exploratory innovation? The heterogeneous effects between central and local subsidy programs," Research Policy, Elsevier, vol. 50(4).
    18. Weili Huang & Guangqi Ma & Xuemeng Chen, 2019. "Does the Level of Environmental Uncertainty Matter in the Effect of Returnee CEO on Innovation? Evidence from Panel Threshold Analysis," Sustainability, MDPI, vol. 11(9), pages 1-16, May.
    19. Lin Cui & Yi Li & Klaus E. Meyer & Zijie Li, 2015. "Leadership Experience Meets Ownership Structure: Returnee Managers and Internationalization of Emerging Economy Firms," Management International Review, Springer, vol. 55(3), pages 355-387, June.
    20. Lin, Ya-Hui & Chen, Chung-Jen & Lin, Bou-Wen, 2018. "The dual-edged role of returnee board members in new venture performance," Journal of Business Research, Elsevier, vol. 90(C), pages 347-358.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:164:y:2021:i:c:s0040162520313354. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.