The Empirical Research On The Outward FDI And The Investment Development Path

This thesis shows that the empirical data of China's net outward investment basically corresponds with Dunning's theory of IDP. The u-curve appears in the relationship between China's net outward investment and GDP. According to the theory and our empirical research, we deduce that China is now in the starting point of the Third Stage of IDP and the outward FDI in China would increase substantially in the next 5-10 years.Our co-integration analysis shows that there is positive correlation between FDI and Chinese economic growth in the long-term. However, the value of the coefficient is very small at present. Our district analysis suggests that China's outward FDI flows are still regional and mainly concentrating on the Asian neighbourhood countries, which is the strategic choice of most countries in the initial stage of investment development. However, with the growing economic strength of China's enterprise and the requirement of further economic development , China's outward FDI has displayed the feature of extending globally to some developed nations. To our surprise is that the mainly sectoral distribution of China's outward FDI lies in the sector of information transmission, computer service and software, which account for nearly 61% of the total outward FDI. This finding seems inconsistent with the concept of IDP .In order to accord with this concept ,China should develop its outward FDI in the labor-intensive areas, having comparative advantages, such as assembly manufacturing and textile industry. Our analysis of the stimulation of the outward FDI suggests that the main reason for China's outward FDI flows are market seeking, but the resource seeking and technology acquisition would increase in the future. To invest in the resource exploitation or build up R&D agencies or hi-tech SMEs in the intelligence and technologies intensive countries will become our future primary investment areas.