Exploring The Political Risk Of Chinese Overseas Investment

Based on the perspective of opposed-stakeholders' behaviors,this paper discusses the political risk and the control strategies.This study has the following two aspects of necessity.in the context of reality,In recent years,some overseas investment in our country,which was generally considered to be promising,has repeatedly failed in the host country market due to inadequate assessment and prevention of political risks caused by opposed-stakeholders' behaviors.from the theoretical background,Through a systematic review of the literature related to the political risk in overseas investment,it is found that the current researches on political risk in overseas investment mainly focuses on the fundamentals of political risk(including source,form,influence,etc.)from the perspective of observable political system and socio-economic environment,lacking of attention to the behavior of stakeholders from the host country,the home country and the third country.Therefore,this paper discusses the political risk from the perspective of opposed-stakeholders' behaviors,which is of great practical significance to accelerate the "going out" and provide theoretical guidance for Chinese enterprises.Therefore,this paper discusses the political risk from the perspective of opposed-stakeholders' behaviors.on the basis of defining the connotation of political risk in detail,this paper integrates the core idea of the existing research and makes a series of research on the political risk and the control strategies of Chinese enterprises' overseas investment from the perspective of opposed-stakeholders' behavior.The first research is to introduce the behavioral perspective of opposed-stakeholders into the characterization of the political risk in overseas investment.The conclusion shows that the formation of the political risk of overseas investment of Chinese enterprises is the result of the joint action of the behaviors of various stakeholders.From the perspective of opposing stakeholder behavior,there are three main types of political risks encountered by Chinese enterprises in overseas investment: the risk of the change of behavior preference of the host government,the risk of uncertainty political events,and the risk of legitimacy crisis.Study 2 carries on the research of study 1,and discusses the evolution process of political risk in overseas investment of Chinese enterprises.Based on the findings of study 1 and previous relevant studies,it is found that one of the important sources of political risk is the behavior of the opposed-stakeholders.However,the behavior of the opposed-stakeholders is essentially a mutual game for their political interests.This study introduces the variable of the legitimacy in overseas investment in the host country,and examines the dynamic evolution process of political risk in overseas investment from the perspective of legitimacy,and constructs the process model of the evolution of political risk in overseas investment of Chinese enterprises.Empirical studies have also shown that,From the perspective of legitimacy,the evolution of political risk of overseas investment projects in China has gone through three stages: the formation of irrational negative attitude,the spread of irrational political confrontation events and behaviors,and the quelling of political confrontation events and behaviors of investment projects.This study analyzes the impact of legitimacy on the evolution of political risk of overseas investment from a dynamic perspective,which provides a new perspective for the study of political risk of overseas investment in China.Based on the conclusions of research 1 and 2,the study 3 discusses the strategies and mechanism of controlling the political risk in overseas investment at the enterprise level.The study points out that the mechanisms for Chinese enterprises to deal with the political risks caused by the behavior of the negative stakeholders in the host country are mainly the prevention mechanism,the dredging mechanism,and the absorbing mechanism.The main strategies include adaptive prevention strategy,adjusting and grooming strategy,and active absorption strategy.Specifically,the investment enterprises can use compliance,alliance and other compliance prevention strategies to deal with the third party's political intervention risk;Using information strategy,training agents,seeking protection umbrella,performance incentives and other adjustment and guidance strategies to deal with the host country's political forces intervention risk;Through CSR strategy,public / media strategy and other dynamic absorption strategies to deal with the project risk of uncertain political events.The theoretical contributions of this study are as follows:(1)deepening the understanding of the political risk of overseas investment in Chinese enterprises from an integrated perspective through introducing the opposed-stakeholders' behavior into the macro common political risk environment.(2)opening the black box of the evolution of the political risk of Chinese enterprises' overseas investment,and constructs the process model of the evolution of the political risk of Chinese enterprises' overseas investment from the perspective of legitimacy.(3)analyzing the control mechanism and control strategy of overseas investment political risk at the enterprise level.At the same time,the conclusions of this paper have important practical implications for Chinese enterprises' overseas investment:(1)the research on Chinese enterprises' overseas investment is helpful for enterprises to strengthen their cognition of project characteristics,so as to manage the political risk caused by the political sensitivity of overseas investment.(2)the process model of the formation of political risk provided by the conclusion of this paper is helpful to guide the overseas investors to guard against the political risk.(3)the conclusion of this paper is helpful to know the coping strategies of Chinese enterprises when facing political risks.