Research On The Influence Of Foreign Shareholdings On Corporate Export Behavior

Since the reform and opening up,China has created a remarkable economic growth miracle,and the booming export trade is an important reason to drive China’s economic growth.During more than 40 years,China’s export trade has constantly welcomed development opportunities thanks to the country’s attention to export activities.In 2001,China formally joined the World Trade Organization,which laid a solid foundation for the leapfrog development of export trade.In 2009,China has became the world’s largest exporter of goods and has maintained this international status to this day.In 2013,driven by the Belt and Road Initiative,China’s export trade maintained steady growth and its export to countries along the route increasd progressively.In recent years,due to Sino-US trade friction and the COVID-19,the international economic recovery is full of uncertainties,and China’s export has faced unprecedented challenges.In response,China central government stressed the determination to keep foreign trade,which made China the only major economy to achieve foreign trade growth in goods under the impact of the global epidemic.Since 2020,accelerating the construction of a new development pattern with domestic major cycles as the main body and domestic and international double cycles promoting each other has become the most important development goal of China.In such a context,strengthening export competitiveness is not only an important guarantee for China’s status as a major trading country,but also an important aspect for China’s steady and long-term high-quality economic development.In practice,strengthening national export foundation should focus on encouraging micro enterprises to expand export orderly.However,as a high-risk business behavior,corporates’ export activities often need to face many practical challenges.From the macro point of view,the export of corporates often face with exchange rate fluctuations and trade friction.From the micro point of view,the export of corporates also face with financing constraints,internal governance,and reputation competition.Therefore,to encourage the export behavior of corporates,it is urgent to face and deal with these challenges.It is necessary to practice,and is needed the academic research to provide related theoretical support.From China’s development experience,open development is an important reason for promoting export.Specifically,actively attracting and utilizing foreign capital is very feasible to promote export activities in reality.However,although the research on foreign investment and export is abundant,it still mainly stays at the macro and medium level,and lacks theoretical guidance on corporate governance.With the gradual opening of China’s capital market,it has become a common phenomenon for foreign investors to hold shares of Chinese listed companies.In this regard,how foreign shareholdings affects the business behavior of micro-entities in the real economy,and whether the introduction of foreign shareholdings is conducive for coporates going global have become the concern from all walks of life.Based on this,this paper explores the influence of foreign shareholdings on corporates’ export behavior,and follows the logical thinking of “whether there is an influence” to “what is the influence mechanism”.There exist eight chapters in this paper,which the first three chapters aim to build a theoretical framework,while the fourth to seventh chapters focus on the empirical level,and the last chapter is the conclusion.In the empirical part,customs export data and listed company governance data are mainly used,and research methods such as PSM method,entropy balance matching method,Heckman two-stage test and placebo test are comprehensively used.The main conclusions of this paper are as follows:First,foreign shareholdings can significantly promote corporates’ export behavior.This conclusion is been verified in terms of corporates’ export decisions,export depth and export breadth.To be specific:(1)Foreign shareholdings can significantly promote corporates’ export decision-making,which is not only conducive to improving corporates’ export participation tendency,but also encouraging corporates to continue exporting.(2)Foreign shareholdings can significantly increase corporates’ export depth,which shows that foreign shareholdings can significantly improve corporates’ export scale and export proportion.(3)Foreign shareholdings can significantly expand corporates’ export breadth,which shows that for foreign shareholdings can significantly promote corporates to diversify the types of export products and export product-country pairs.Further research finds that:(1)Foreign shareholdings can significantly affect corporates’ export competition strategy,but such corporates tends to adopt cost competition strategy rather than quality competition strategy.(2)Focusing on the export trade type,it finds that foreign shareholdings promote exporters to have more processing trade rather than general trade,which indicates that foreign shareholdings still has limitations in improving the export quality and upgrading for Chinese corportates.(3)Foreign shareholdings can significantly promote corporates to set up overseas subsidiaries,which indicates that foreign shareholdings is conducive for corporates to achieve international development.(4)It finds that the export behavior of corporates mainly significantly affected by foreign strategic shareholdings,while the effect of foreign non-strategic shareholdings from the secondary market is not significant.(5)Distinguishing the nature of corporates property rights and the process of marketization,it finds that in the non-state-owned group and the group with the rapid process of marketization,foreign shareholdings show a more significant impact on promoting corporates’ export behavior.Second,easing financing constraints is an important mechanism for foreign shareholdings to influence corporates’ export behavior.Foreign shareholdings help corporates get continuous and stable financial support and alleviate financing constraints,thus having a positive impact on promoting corporates’ export decisions and export performance.It shows in three aspects,including export decision,enterprise export depth and breadth.In terms of corporates’ export decision making,foreign shareholdings can improve corporates’ current export tendency and continuous export willingness by alleviating financing constraints.In terms of export depth,foreign shareholdings can promote corporates to increase export scale and export proportion by alleviating financing constraints.In terms of export breadth,foreign shareholdings can promote corporates to enrich the types of export products and product-country pairs by alleviating financing constraints.The above findings still hold by replacing the measurement of corporate financing constraints,using PSM method to alleviate the self-selection bias from foreign shareholdings,and removing foreign ownership samples.Therefore,from the perspective of capital resources,this chapter verifies that easing financing constraints is the intermediary path of foreign shareholdings affecting corporates’ export behavior.Third,restraining the opportunistic behavior of controlling shareholders is an important mechanism for foreign shareholdings to influence corporates’ export behavior.Previous studies have shown that corporates’ ownership structure is generally concentrated in China,and the principal-agent problem between controlling and minority shareholders harms corporates’ long-term development seriously.Among different opportunistic behaviors,controlling shareholders’ equity pledge accompanies by a series of problems,such as the increase of the risk of control transfer,the increase of operational risk,the increase of hidden danger of resource outflow,and the weakening of credit financing ability,which will greatly reduce the corporates’ ability to maintain and acquire resources.However,the corporates’ export behavior depends on the strong resource support,so the controlling shareholders’ equity pledge will have a negative impact on the corporates’ export behavior.Empirical test finds that foreign shareholdings can promote export behavior by reducing the share pledge ratio of controlling shareholders.It also shows in the three dimensions of corporates’ export behavior,including export decision,export depth and breadth.In the robustness test,the above findings still hold by changing the measurement of corporate internal governance,using PSM method to alleviate the self-selection bias from foreign shareholdings,and removing foreign ownership samples.Therefore,from the perspective of restraining controlling shareholders’ opportunistic behavior,this chapter verifies internal governance is an important intermediary path for foreign shareholdings to influence corporates’ export behavior.Finally,improving corporate reputation is an important mechanism for foreign shareholdings to influence corporates’ export behavior.Foreign shareholdings is often interpreted by the outside world as a positive signal of the good operation of corporates,and foreign shareholders can play an important role in urging corporates to fulfill their social responsibilities and promote the accumulation of reputation of corporates.A good reputation and image will become the competitive advantage of corporates in export,which has a positive impact on corporates to improve their export intention and strengthen their export performance.Using social responsibility contribution value per share as the measurement of corporate reputation image,it finds that: foreign shareholdings has a positive impact on corporates’ export behavior by improving their reputation.It shows in corporates’ export decision,export depth and export breadth.In the robustness test,the above findings still hold by using the cumulative CSR as the alternative measurement,using PSM method to alleviate the self-selection bias from foreign shareholdings,and removing foreign ownership samples.Therefore,from the perspective of reputation,this chapter verifies corporate reputation is an important intermediary path for foreign shareholdings to influence corporates’ export behavior.There are four innovative points: First,it provides new topic for the study of corporate governance theories by combining the international business behavior of export in the real economy,thus expanding the application scope of such theories.Previous literatures about the application of those theories mainly focus on corporate investment efficiency,financing or innovation.However,there is still insufficient attention on corporates’ international operation behavior.This paper expands the research and application scope of corporate governance theories and makes up for the lack of attention in existing literature.Second,it takes foreign shareholdings as the entry point,and provides a new perspective for the research on the influencing factors of corporates’ export behavior.Existing literature studies on factors influencing corporates’ export behavior mainly focus on macro perspectives such as exchange rate and trade uncertainty.In recent years,there has been a series of literatures focusing on the background of overseas directors,but there is still a lack of attention on foreign shareholdings.In this paper,foreign shareholdings is as the starting point to provide a new perspective for the research on the influencing factors of corporates’ export behavior.Third,it provides new research evidence for the economic consequences of foreign shareholdings.Specifically,from the three paths of financing constraints,internal governance and corporate reputation,it systematically explains the micro mechanism of foreign shareholdings on corporates’ export behavior,and deepens the understanding of the impact of foreign shareholdings on enterprises in the real economy.Finally,it provides empirical evidence for foreign shareholdings effect from channel heterogeneity perspective.Some existing studies have considered the differences of foreign shareholders’ from country perspective.This paper divide foreign shareholdings into strategic and non-strategic shareholdings,and finds that strategic shareholding has the significant positive impact on corporates’ export behavior.It makes up for the lack of attention on channel heterogeneity of foreign shareholdings in previous literatures,and provides empirical evidence for encouraging foreign strategic investment in China.The research of this paper has both theoretical value and practical significance.In terms of its theoretical value,there are three main aspects: First,this paper enrichis the literature on the influencing factors of corporates’ export behavior from the perspective of corporate governance.Second,this paper further deepens the understanding of the influence of corporate governance on corporates’ export behavior by analyzing the influence mechanism.Third,this paper contributes to the enrichment of empirical evidence on the microeconomic consequences of foreign shareholdings.In terms of its practical significance,there are two main dimensions: on the one hand,this paper provides empirical evidence for the government and other relevant policy makers to guide the introduction of foreign capital and encourage corporates for international development.On the other hand,this paper provides practical enlightenment for listed companies to participate in export competition through corporate governance means,in order to realize the international development of corporates.