The Effect Of Investment Liberalization On China's OFDI Scale

China has made major reforms on OFDI policy since the implementation of “go global” strategy,and several countries adjust their FDI policy each year,both China's OFDI policy and most of world's FDI policy become liberalization.This article suggests that OFDI scale can be affected by OFDI policy of home country and FDI policy of host country,OFDI policy of home country can be divided into OFDI national policy and OFDI international policy,FDI policy of host country also can be divided into FDI national policy and FDI international policy.National policy refers to policies which were made independently by home country or host country,international policy refers to policies which were formulated through enforcing IIA with other countries.China's OFDI scale has been the third highest in world since 2012,this dissertation uses Chinese data to analyze the effect of investment liberalization on China's OFDI scale in the perspective of home country and host country.This thesis includes 6 chapters.Chapter 1 introduces the research background and significance,identifies research objectives,specifies the key definitions,and then summarizes innovations and shortcomings of the research.Chapter 2 reviews the related literatures of investment liberalization,summarizes the achievements of this field,finds the research gap and try to fill this gap.Chapter 3 analyzes the impact of investment liberalization on OFDI scale in theory,summarizes the cause for emergence of investment liberalization and constructs the influencing mechanism of investment liberalization on OFDI scale based on five investment liberalization models in order to provide theoretical basis for chapter 4 and 5.Chapter 4 empirically researches the impact of China's OFDI liberalization on China's OFDI scale,defines the connotation of OFDI liberalization,introduces the development of China's OFDI national policy liberalization and OFDI international policy liberalization,and then uses error correction model,impulse response function and variance decomposition method to test the relationship between China's OFDI liberalization and China's OFDI scale based on the Chinese data from 1980 to 2014.Results show that the liberalization of both China's OFDI national policy liberalization and international policy liberalization enlarge China's OFDI scale significantly,and the positive impact of China's OFDI international policy liberalization is greater than the positive impact of China's OFDI national policy liberalization.Chapter 5 empirically researches the impact of host country's FDI liberalization on China's OFDI scale,defines the connotation of FDI liberalization,introduces the development of host country's FDI national policy liberalization and FDI international policy liberalization,and then uses ordinary least square and system generalized method of moments to test the impact of host country's FDI liberalization on China's OFDI scale based on the panel data from 2003 to 2014,and then classifies host country into different categories according to human capital endowment and physical capital endowment,analyzes whether the effects of different host country's FDI liberalization were consistent.Results show that FDI national liberalization hasn't enlarged China's OFDI scale,but FDI international liberalization has enlarged China's OFDI scale significantly.The FDI liberalization of developed host country and developing host country have similar effects on China's OFDI scale,while the number of IIA that concluded by developed host country has negative effect on China's OFDI scale,but the number of IIA that concluded by developing host country has positive effect on China's OFDI scale.Chapter 6 summarizes the content of above chapters,proposes recommendations about China's OFDI national policy and OFDI international policy in order to promote China's OFDI scale.The OFDI national policy reforms include continue to reform OFDI management system and foreign exchange management system deeply,improve fiscal and financial policy,urge local government to implement OFDI national policy,promote the fusion of investment policy with trade and diplomatic policy.The international policy reforms include continue to conclude IIA with host countries actively,revise content of original IIA timely,focus on different content when conclude IIA with different host countries,try to conclude multilateral or regional IIA with host countries,implement the signed IIA as soon as possible.The first innovation of this dissertation is studying the impact of investment liberalization from a new perspective,empirically researches the impact of investment liberalization on China's OFDI scale.The second innovation lies in its comprehensive research content,classifies investment liberalization into four categories according to implementation level and subject,and then research the impact of each of investment liberalization on OFDI scale.The third innovation is doing more detailed empirical test,classifies IIA into different categories according to its terms,and then measures the liberalization degree of IIA accurately.The first limitation is constructing an influencing mechanism of investment liberalization on home country's OFDI scale which based on five popular investment liberalization models,while these five models suppose OFDI home countries usually were developed countries,it may be inappropriate to use these models to analyze China's OFDI scale problem.The second limitation lies in selecting existing indexes as proxies for liberalization degree of national policy,rather than designing an index based on national policy content,this may result in measuring the liberalization degree of national policy inaccurately.