The Empirical Studies On Effects Of Outward Direct Investment From China

Since the 1990s, the economic integration develops more and more quickly. Considering the bombing growth of technology, China, the biggest developing country, is paying much more attention to the outward direct investment (ODI). We need to show ourselves on the world stage to catch the opportunity of economic globalization and integration, as well as making our domestic market and international market fuse together. If we could not entre the world market, we will be obsolete by our competitors.Facing up to the global incorporation, every country and every company confront the fierce international competition unavoidably. Compared with developed countries, our ODI started fairly late with a small scale and the study of foreign direct investment was obviously slow. Confronting the fierce competition, some of home companies have already entered into the international commercial market, but there are several influencing factors restricting China's investment to expand. Because China is a large developing country, the factors are different from the others, so we must consider the characteristics of ourselves. This paper studies the influencing factors launching on the empirical analysis.This paper focuses on the influencing factors. Firstly, it has examined the theories including domestic ones and abroad ones; secondly, it finds out the influence factors based on an overall consideration. Considering of the characteristics and theories of China and covering the data form 2004 to 2008, this paper examines the gross domestic product, save of investment, export, cost of labor, R&D and the overall labor productivity's effect of China ODI, focusing on the province of home country.From the result of the empirical analysis, we could find that the gross domestic product, save of investment, export and the overall labor productivity have made positive and significant effects on China's ODI, while the cost of labor made negative and significant effects on ODI. R&D has a positive determinant on ODI, but the effect is not significant. When we make the empirical analysis focusing on the provinces which have been divided into three parts based on the level of economic growth, the factor of R&D has become an significant effect to the eastern region which the level of economy are much higher than other regions. So the factor of R&D changes with the level of economic growth.At the end of this study, this paper gives some advices to improve our investment, basing on an overall consideration of macro level in provinces and micro level in companies. The policy has the following main aspects:macro government control and policy support, our government should help some of the big companies which could make a good example to the followers, as well as the matters which need attention when companies invest, such as the methods of investment and the locations of investment. And we must notice the importance of core technology and intellectual property right in the development of outward direct investment.