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

摘要

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.