Our Country’s Heterogeneous Firms’ Internationalization Path Selection

Economic globalization has led to the rapid development of international trade, and the trade patterns and types are also changing. And multinational corporations are becoming more and more important in the world economy. In the past10years, global foreign direct investment (FDI) has also been a rapid development. Despite of the financial crisis, FDI still has a rapid development. At the same time, the global production and trade patterns have undergone important changes, the proportion of intermediate goods trade is becoming an important part of international trade. However, with the development of international trade, trade protectionism, trade frictions and disputes continue to occur. Trade remedy measures, technical barriers to trade, import restrictions and other kinds of trade barriers measures have a further impact on China’s foreign economic and trade, which make China’s exports suffer large losses. In this context, China’s heterogeneous enterprises have a great puzzle on internationalization path, export or FDI. So it has important theoretical value and practical significance to research the issue.New-new trade theory is the new research paradigm to research and explain the trade phenomenon and trends. Different with traditional trade theory, which assumes that the enterprise is homogeneous, the new-the new trade theory assumes that enterprises are heterogeneous, mainly on the differences in productivity, which leads the analysis of variables to the enterprise level. The research of enterprise level variable (firm-level variations), explores the new frontier of international trade theory and empirical research. New-new trade theory concerns on the relationship between the heterogeneity and export and FDI decisions-making and concerns the choices of each organizational form in international production.This paper commenced is in the framework of the new-new trade theory. On the basis of previous researches, the paper tests the validity of the new-new trade theory of China’s heterogeneous enterprise internationalization path, through the method of the theory and empirical test. The paper, based on the assumptions of horizontal FDI and vertical FDI expanded the new-new trade theory, and got the conclusion that firms with high productivity will choose FDI and firms with comparatively lower productivity will choose export. And also, the paper tested the model with the current situation of our country’s heterogeneous firms’ internationalization path selection in order to put forward feasible suggestions.The main body and research results as follows. The first part of the paper is the introduction part, which describes the background and purpose of the paper. The second part is the literature summarization part of the new-new trade theory. Firstly, the paper introduces the new-new trade theory through compares the differences among the new-new trade theory, the new trade theory and the traditional trade theory. The subsequent part is the analysis of current researches from two directions, trajectory of research and development as well as domestic researches and foreign researches. And the next part is the train of thought and method, through analysis the shortcomings of existing researches. In the third part, the paper, based on the assumptions of horizontal FDI and vertical FDI expanded the new-new trade theory, and got the conclusion that firms with high productivity will choose FDI and firms with comparatively lower productivity will choose export. The fourth part of the paper tests the basic conclusions of the new-new trade theory, using sub-industry data in China, export and FDI-related data and so on, and analysis of heterogeneous enterprise’main problem in the choices of international path. In the last part, the paper put forward feasible suggestions for the choice of the internationalization of China’s heterogeneous enterprise.In a word, the paper was a research of associate newest international trade theory and China’s practice. It extended and tested the theory, and instructed our country’s international and investment decision. But because of limited Chinese micro firm data, the paper needed further research and development.