Analysis Of The Influence Factors Of China's Outward Foreign Direct Investment

Remarkable economic achievements have been attained in China in the past three decades and the effective use of foreign investment has contributed much to it. China's outward foreign direct investment has been once again the highlight of the world economy by the average annual growth rate of49.9%during2002to2010. According to Dunning's stage theory of international direct investment, the macroeconomic fundamentals of outward foreign direct investment have almost been built in China. Economic globalization is irreversible, and conducting large-scale foreign direct investment has become a strategic choice to achieving the layout of the world for Chinese businesses.However, there are still many uncertainties and instabilities under the new situation, so we should study China's OFDI factors comprehensively and systematically. Only by doing this can we make effective stimulus policies and risk prevention measures for "going out". In this paper, the influence factors of China's OFDI were studied against the background of the external and internal new situation. On the basis of simplifying the current mainstream theoretical model of FDI, a qualitative analysis was made using the method of systems theory and a quantitative analysis was made using spatial econometrics methods. After the in-depth analysis, a generalized analytical framework access to the influence factors of China's OFDI was concluded, which is not only a development of the current theories, but also is beneficial to accelerate China's outward "going out".The main content are as following:1. Foreign direct investment theories. The main theories include the monopolistic advantage theory, product life cycle theory, internalization theory, the eclectic theory of international production, theory of comparative advantage and factor induced by investment portfolio theory. These theories are the theoretical basis of this paper.2. Qualitative analysis using the method of systems theory. The findings showed that China's OFDI is a complex system and "third-country effect" is widespread existed. A home system, subsystems, micro-systems at different levels and were established to find the influence factors of China's OFDI, providing a theoretical support for describing the relationship between economic variables and estimating parameters of the model.3. Empirical analysis of the influence factors of China's OFDI. Based on the panel data of China's OFDI from2003to2008covering57destination countries, the cross-sectional data model, fixed effects model, random effects model, dynamic panel model and spatial panel model based on space-perspective were built to study how the chosen determinants influence China's OFDI. The main research results are as following: the influence of the "third-country affects" on the investment existed between China and the host countries; the investments in different regions had spatial complementation effects; the OFDI was continuous and had aggregation effects; the OFDI was trade-oriented and did not driven by pursuing of resources; the bilateral distance and bilateral foreign exchange rate did not have significant affects on the OFDI.4. Concluding the main ideas, pointing out the aspects to be improved and giving the direction of further research.