Research On The Determinant Factors Of China’s Outward Foreign Direct Investment Location Choices

With the continuous development of world economy, China has become one of the main investment countries.China’s OFDI rise will have profound impact on China’s economy, but China’s OFDI is unequal geographical distributed, and there are a lot of problems about China’s enterprise OFDI location choice. This article from the new economic geography angle to examine China’s OFDI location choice, added the space location factors into the analysis framework of mainstream economics, and introduced the transportation costs, economies of scale, externalities, factors such as market size, and studied the system of the host country, policy, infrastructure and other conditions can affect concentration of centripetal and centrifugal forces, and then affect the OFDI location choice. This article will open up a wider research train of thought for location distribution of China’s OFDI.Fully combing the existing relevant theory and literatures domestic and abroad is presented in this paper, First of all, from the process of location distribution of China’s OFDI and the present condition of the location choice and the problems of China’s OFDI location choice analysis, secondly, from angle of the new economic geography and traditional economic factors, institutional factors to comb the three influencing factors of OFDI location choices and to provide theoretical basis for the setting and the selection of variables in chapter5and finally, the empirical analysis on the determinant factors of location selection of China’s OFDI on the basis of new economic geography, economy and system three aspects, analyzed variables such as historical OFDI, the size of the market, trade cost, the cross term of trade cost and the market size, interest rate, exchange rate, economic openness, bilateral investment agreements,using GMM estimation method of regression, the empirical results found that China’s OFDI location choice has obvious accumulation effect, that is to say, China’s OFDI tends to the exits OFDI larger countries and regions;Trade costs has a negative relationship with China’s OFDI location choice, namely lower trade cost helps to attract China’s OFDI inflow; The size of the market for the promotion of OFDI will be offsite by lower transport costs; System variables as economic openness and bilateral investment agreements are have positive influence on China’s OFDI location choice; Traditional economic variables such as interest rate, exchange rate on the impact of location selection of OFDI is gradually weakened.Based on the above theory and empirical analysis, this article gives the relevant policy recommendations from the government level and enterprise level,in order to well guide Chinese multinational companies to make better OFDI location choices.