Table 4 The effect of FDI and its modes...

Table 4

The effect of FDI and its modes of entry on domestic entrepreneurship – the role of host country absorptive capacity

	Market capacity			Human capital
	FDI	Greenfield	M&A	FDI	Greenfield	M&A
	(1)	(2)	(3)	(4)	(5)	(6)
FDI	0.805^***			−3.187^**
	(0.045)			(1.329)
Greenfield		0.680^***			−2.854^**
		(0.066)			(1.304)
M&A			0.619^***			−0.579
			(0.062)			(0.581)
FDImarket capacity*	0.001
	(0.003)
Greenfield*market capacity		0.010^*
		(0.006)
M&Amarket capacity*			0.002
			(0.003)
FDIhuman capital*				0.041^***
				(0.014)
Greenfield*human capital					0.037^***
					(0.013)
M&Ahuman capital*						0.012^**
						(0.006)
Market capacity	−0.030	−0.106^**	−0.042^*
	(0.028)	(0.051)	(0.025)
Human capital				−0.245^***	−0.224^***	−0.035
				(0.080)	(0.080)	(0.024)
Openness	−0.418^***	−0.555^***	−0.008	0.163	0.052	0.234^*
	(0.086)	(0.108)	(0.094)	(0.264)	(0.268)	(0.131)
Labor	1.549^***	2.258^***	2.946^***	−0.280	−0.240	1.444^**
	(0.450)	(0.462)	(0.673)	(0.707)	(0.649)	(0.582)
Exchange	−0.001	−0.005^***	2.160^***	1.745^***	1.373^**	2.653^***
	(0.001)	(0.002)	(0.544)	(0.655)	(0.648)	(0.736)
Population growth	−0.105^***	−0.136^***	−0.082^*	−0.180^***	−0.191^***	−0.182^***
	(0.021)	(0.024)	(0.048)	(0.028)	(0.028)	(0.042)
Government size	0.007	0.018	0.011	−0.047^**	−0.039^*	−0.016
	(0.010)	(0.014)	(0.014)	(0.023)	(0.021)	(0.013)
Financial depth	0.008^***	0.008^***	0.000	0.003	0.002	−0.009^***
	(0.002)	(0.002)	(0.002)	(0.002)	(0.002)	(0.002)
Constant	0.735	0.622	1.655	27.856^***	25.816^***	8.121^***
	(0.709)	(0.790)	(1.104)	(8.585)	(8.410)	(2.536)
Durbin–Wu–Hausman test	0.000	0.000	0.000	0.000	0.000	0.000
Overidentification test	0.294	0.304	0.707	0.677	0.561	0.177
Underidentification test	0.001	0.006	0.000	0.002	0.000	0.113
Observations	835	775	558	570	546	392
R-squared	0.577	0.512	0.222	0.265	0.279	0.112

	Market capacity			Human capital
	FDI	Greenfield	M&A	FDI	Greenfield	M&A
	(1)	(2)	(3)	(4)	(5)	(6)
FDI	0.805^***			−3.187^**
	(0.045)			(1.329)
Greenfield		0.680^***			−2.854^**
		(0.066)			(1.304)
M&A			0.619^***			−0.579
			(0.062)			(0.581)
FDI*market capacity	0.001
	(0.003)
Greenfield*market capacity		0.010^*
		(0.006)
M&A*market capacity			0.002
			(0.003)
FDI*human capital				0.041^***
				(0.014)
Greenfield*human capital					0.037^***
					(0.013)
M&A*human capital						0.012^**
						(0.006)
Market capacity	−0.030	−0.106^**	−0.042^*
	(0.028)	(0.051)	(0.025)
Human capital				−0.245^***	−0.224^***	−0.035
				(0.080)	(0.080)	(0.024)
Openness	−0.418^***	−0.555^***	−0.008	0.163	0.052	0.234^*
	(0.086)	(0.108)	(0.094)	(0.264)	(0.268)	(0.131)
Labor	1.549^***	2.258^***	2.946^***	−0.280	−0.240	1.444^**
	(0.450)	(0.462)	(0.673)	(0.707)	(0.649)	(0.582)
Exchange	−0.001	−0.005^***	2.160^***	1.745^***	1.373^**	2.653^***
	(0.001)	(0.002)	(0.544)	(0.655)	(0.648)	(0.736)
Population growth	−0.105^***	−0.136^***	−0.082^*	−0.180^***	−0.191^***	−0.182^***
	(0.021)	(0.024)	(0.048)	(0.028)	(0.028)	(0.042)
Government size	0.007	0.018	0.011	−0.047^**	−0.039^*	−0.016
	(0.010)	(0.014)	(0.014)	(0.023)	(0.021)	(0.013)
Financial depth	0.008^***	0.008^***	0.000	0.003	0.002	−0.009^***
	(0.002)	(0.002)	(0.002)	(0.002)	(0.002)	(0.002)
Constant	0.735	0.622	1.655	27.856^***	25.816^***	8.121^***
	(0.709)	(0.790)	(1.104)	(8.585)	(8.410)	(2.536)
Durbin–Wu–Hausman test	0.000	0.000	0.000	0.000	0.000	0.000
Overidentification test	0.294	0.304	0.707	0.677	0.561	0.177
Underidentification test	0.001	0.006	0.000	0.002	0.000	0.113
Observations	835	775	558	570	546	392
R-squared	0.577	0.512	0.222	0.265	0.279	0.112

Note(s): Robust standard errors are in parentheses; ^*, ^** and ^*** denote significance levels at 10, 5 and 1%, respectively

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