The Analysis On The Institutional Variables Influencing China's FDI Location Choice

After World War II, the overseas direct investment of western enterprises increases rapidly, and have formed a lot of multinatioanal corporations engaged in internationalization production and management . This kind of phenomenon has drawn common concern of western scholars, they carry on research from different angles and respect, probe into the reason of enterprise's foreign direct investment, then formed a lot of theories. Unfortunately, there haven't been having systematic and intact location theory can explain location choice of international direct investment yet up to now. Moreover, these mainstream theories are all to regard the developed country as the research object, most discussion is about hard environment and economic factors, neglect system factors to location choice of international direct investment, so, all these have certain limitation and one-sidedness. This paper produce the location theory and international direct investment theory as the foundation, in terms of the institutional influence factors, analyze the foreign direct investment distribution of our country.I use the gravity model, adopt the FDI from China to 44 countries of 2003, and these states policy real data of variables, use GDP and distance as control variables, prove three big class 9 institutional factors which influence our country FDI location choice. One kind is formally restricted legal institutional arrangement, mainly including the intensity of legal norm protection and property right by legal system of host country. Second , economic institutional arrangement of the host country, mainly includeing trade policy , monetary policy , liberalization intensity of financial market , government interference intensity to preferential policy , the foreign capitals policy of Central Bank,etc.; Third, the host country institutional arrangement of enterprises operation expenses, mainly including the intensity of salary policy marketization and black marketing i.e. transparency of market. For comparing the intensity of 9 institutional factors, I use gradual return methord , put these institutional factor variables into the same equation ,and have drawn the following conclusion: formally restricted legal institutional arrangement is most intensity among three variables, secondly it is the institutional arrangement of enterprises operation expenses. Finally, on the basis of analyzing factor influence degree of the institution, I have put forward the policy recommendations on the location choice to the FDI of our country to the...