Research On Sole Ownership Of Multinational Corporations Direct Investment In China

The utilization of foreign capital is very important in China's reform and open policy. With the development of economic globalization, many multinational enterprises gradually enter China's market and investment in China is increasingly common. Since the late 1990s, foreign direct investment emerges a wave of wholly-owned tendency, which already become an indispensable part in multinationals global Strategy. In recent years, with the gradually deepening of China's reform and opening, foreign policy gradually unloosening more apt to chase the profit maximization, stepwise regression of primitive impulse into capital according to China's accession to WTO commitments. The way foreign direct investment entering China market is changing and more companies adopting foreign-owned or additional existing investment way to improve its shareholding proportions, wholly owned company has become a dominant form of multinational investment in China.This paper mainly describes the present situation and the features of sole ownership of multinational investment in China, such as Transaction cost theory and Monopolistic advantage theory. First, the theory of multinational corporations is employed to analyze the reason of the tendency of sole ownership of multinational investment. Then, the papers investigate the motivation of sole ownership of multinational investment from micro and macro perspective. Finally, empirical model is introduced to explain the correlation between sole-owned trend in transnational corporations'direct investment and some important factors.From the empirical research of 1991-2010 China's real GDP, labor productivity in the construction industry, the industrial output value and output value of high-tech enterprise zones and other empirical data, we can see that China's market potential, labor productivity, level of industrial development and Level of technology have a certain influence on the sole-owned trend in transnational corporations'direct investmentThis indicates that with China's economic development, the market expanding, as well as market-oriented continuous improvement, foreign investors more inclined to sole mode. The paper aimed to analyze the factors that led to sole ownership and the impact on China's economic development of the universal sole ownership, followed by some policy recommendations for state owned enterprises in the face of the increased proportion of sole ownership of multinational investment...