An Analysis On Factors Affecting Location Choice Of China's Freign Direct Investment

Location choice is a very important issue when a country intend to carry out outward foreign direct investment, but during the operation of China's outward direct investment, the importance of this issue has always been ignored, and the theoretical system is not perfect too. Since 1979,the State Council put forward the strategy of "Going Global",which strongly pushing forward China's foreign direct investment. With the development of China's foreign direct investment,some problems are become apparent, such as excessive concentration of investment in distribution; investment size can not match the status of China's economic and power; and investment efficiency is not high enough and so on. This paper decide to study the influencing factors of China's outward foreign direct investment from the angle of location choice. and attempts to provide some references for decision-making about China's outward foreign direct investment.Firstly, the relevant international and domestic theories and empirical research of foreign direct investment were summarized for the article, this provide a foundation for empirical research. Then analyzed the history of China's outward direct investment in chronological order. And given a description of investment size, distribution of geography and industry, and investors about China's outward direct investment. Then collect the above information and summarize the problems of China's outward direct investment. The next part is the main part of this paper, with the guide of the summary of theories and empirical researches studied by others, and taking into account the data availability, we choose 79 countries and regions which occupied most China's outward direct investment as sample, and 2008 as sample period. Using cross-sectional data set a multiple linear regression model. Especially see the impact significant and direction of China's outward direct investment caused by the follow factors:China's lag phase of the investment flow to host country (PCDI),host country's market size(GDP),per capital income of host country (GNIP) exchange rate of each country (EXCH),China's export to each country(EXPO) and China's total investment to host country(TCDI).we also import a dummy variable into our model to see if there's differences of China's outward foreign direct investment between the Five continents. After the test of multicollinearity,autocorrelation and heteroscedasticity, the final conclusions is as follow:Firstly, there's no differences of China's outward foreign direct investment between the Five continents. Secondly, the impact of the GDP, GNIP, and EXCH of host country to China's outward foreign direct investment is not significant, and the PCDI,EXPO and TCDI of the host country got a very serious effect to China's outward foreign direct investment. and the direction is negative, positive and positive.According to the result of empirical research and now situation of China's outward foreign direct investment, the article concludes with some promotions and improvement recommendations of China's outward foreign direct investment:At first we need to choose the right foreign direct investment location strategies, and change the investment-oriented model, then enhance China's comprehensive national strength and form the dominance of multinational corporations. At last consider to adopt different investment strategies according to different markets and to enlarge foreign trade to stimulate and promote China's outward foreign direct investment.