Analyze Influence Of Chinese OFDI's Particularity On Home Country's Growth Efects

Growth is one of the core issues of economics.Since the 2008 global financial crisis and the European debt crisis,the world economy has entered into a post-crisis era,and China's economy has entered into the new normal.With the development of China's economy,a new era of China needs new growth momentum.According to the classical economic theory,labor,capital and technology are the main dynamic factors to promote economic growth,but as the labor costs are rising,demographic dividends are vanishing and reform bonus is fading away,those all make world market weak demand,and the globalization dividend is lost;the traditional elements spurring growth are lack of impulses.At the same time,China's outward foreign direct investment shows a good development trend,has become the important power to promote the growth of its home country in the new age.The purpose of this paper is to answer whether the particularity of China's outward foreign direct investment bring the particularity of home country growth effects.On the one hand,based on the existing international investment theory,the open economy theory,the international trade theory,and the economic growth theory,this paper will find a suitable study angle to analyze China's outward foreign direct investments' growth effects on its home country.This will make some contributions to the OLI theory and the IDP theory;On the other hand,not only has it provides the policy basis and reference to the development of China's outward foreign direct investment and opening up,but also has it to promote China's international competitiveness,make China on the way of a giant economy to a powerful economy.This paper based on existed theories,finds the suitable study angle to analyze the particularity of outward foreign direct investments' effects on Chinese home.Clarifying the particularity of Chinese OFDI base issues,this paper uses empirical evidence in China under the study angle,then,identifies the contents and finds the sources of OFDI's effects on Chinese home,provide policy suggestions,which are the main margin contributions of this thesis.First,developed countries' OFDI can bring home growth effects,this paper,by means of literature review,studies OFDI's home country's economic growth effects,employment growth effects,technological growth effect,trade growth effects,industrial growth effects,and comprehensive growth effects,etc.,which expounds the existed theoretical mechanisms and studies the existing theoretical models.Second,this article includes the viewpoint of OFDI heterogeneity,and finds that developed countries,Japan in Asia,developing countries like China have different OFDI characteristics.In general,developed countries and Japan in Asia,their OFDI are flowing to less developed counties,they have ownership advantages,location advantages,and internalization advantages,their home countries' effects are in line with the five stages investment development path.OFDI is classified into vertical ones and horizontal ones;Japan's OFDI is based on the marginal industrial transfer theory,essentially is the OLI paradigm and fulfills the IDP theory;Different from the developed countries and theirs growth path,Lucas paradox appears mainly in developing countries,evident in China;China's OFDI is not based on OLI advantages,which flows to developed countries,is different from developed ones in investment aims,entrance ways,and host countries' choice.Third,according to Rugman's production transaction costs internalization theory,this paper further puts forward country specific advantage theory and firm specific advantage theory,studies OFDI from the angles of firm competitive advantages,home country competitive advantages,and host country competitive advantages.On the home effects of developed countries' OFDI,this paper combines heterogeneity and Rugman's country specific and firm specific competitive advantages,finds the study angle for this paper,which is suitable to study the particularity of Chinese OFDI on its home country effects.To answer whether Chinese OFDI particularity brings the particularity of home country effects,this paper first identifies the issue,uses theoretical and statistic methods,clarifies Chinese OFDI's particularity.China's OFDI has huge scale and fine trends,entrances the host county mainly by merger and acquisition,secondly by Greenfield investment,mainly flows to the tax havens and developed countries,prefers host countries' manufacturing,real-estate and finance,and servicing industries,those firms are mainly from Shanghai,Guangdong,Tianjin,Beijing,Shandong,etc.,all are more developed eastern provinces,most are state-ownership or private ones,in all seven characters.Then according to this paper's theoretical framework,use four empirical evidences to answer whether Chinese OFDI's particularity brings the particularity of home country growth effects.1.Decompose production function,Chinese OFDI's home country growth effects are not significant,it is mainly pulled by labor,capital,and technology,and has regional differences.In the short run,it will cover sank costs,and the home country effects are weak.China's OFDI has its particularity;its aims are resource seeking,market seeking,and technology seeking.Therefore,the frustrated ones' home effects are not significant,and the success ones' home effects are not played,which make the effects in the short run not evident.2.Use PVAR model and find that,in the short run,Chinese OFDI's home growth effects should pay sank costs,but in the long run,it will bring positive home growth effects.China's decentralization of central government mechanism can clarify it.China's state-owned big firms always has fund and policy sponsors,the return period is long,while private firms' OFDI follows institute arbitrage process,which also time consuming,so,Chinese OFDI's home effects has sank costs in the short run and plays out positive effects in the long run.3.To further find the sources of Chinese OFDI's particularity on home country effects,this paper use the method of stochastic frontier analysis,finds that,compared to countries' particularity,Chinese particular OFDI's home technological growth effects are more decided by its own particularity.Whether use merger and acquisition or Greenfield investment,multinational firms' home technology growth is mainly coming from the firms' particularity;While Chinese OFDI both includes competitive advantages and competitive disadvantages,decided by firm particularity,home county particularity and host country particularity,among which the firm particularity plays the most evident function.4.This paper uses horse rise test and finds that,home and host country particularities squeeze out home country employment to some extent,make Chinese OFDI's home employment effects from being positive to not significant.Further,this paper compares China's none-advantage multinational corporations',west developed countries',Japan's,and developing countries' home growth effects.Focus on the analysis of the bridge between international industrial capacity cooperation and OFDI,emphasize Chinese OFDI's home growth effects in One Belt and One Road.Different from other OFDI,it is a mutual beneficial mode.Different from historical experience,OFDI in One Belt and One Road can bring home growth effects,push host county growth,and spur the growth of surrounding nations;it is not a snatching OFDI,but a mutual beneficial mode.This paper is suitable for the analysis of home growth effects of Chinese OFDI particularity,which builds the theoretical framework and try to discuss,provide empirical evidence,use theoretical analysis and empirical methods,it extends the existed international investment theory and makes marginal contributions to the growth theory.It provides a theoretical analysis framework and brings empirical evidence,combines OLI paradigm,IDP theory,heterogeneity OFDI theory,country specific advantage theory and firm specific advantage theory.Concludes that,sponsor the development of private firms,play the advantages of state-owned firms,bridge the international industrial capacity and exploitation priority strategies,fully considers the host country risks,all these are policy contents.