Foreign direct investment, investment of small and medium enterprises - Crowding out effect?

The study was conducted to assess the impact of FDI inflows on investment activities of small and medium enterprises (SMEs). Research results show a crowding out effect of FDI inflows, which implies that localities need to focus on the quality of FDI inflows instead of quantity. In addition, the study also considers the impact of internal factors of SMEs, Bayesian regression results show that the size of SMEs, SMEs with e-commerce activities tend to promote investment activities; while the number of years of operation of the business has a negative impact on this activity.