Research On The Influencing Factors Of Location Selection Of China’s Manufacturing Industry Outward Foreign Direct Investment

China is a well-know manufacturing country, the total size of manufacturing has been ranked first in the world. However, the manufacturing industry is facing a dual crisis of the domestic overproduction and the increasing foreign competition at present, the situation is urgent to reverse through outward foreign investment, and a large number of excellent enterprises also have the strength of outward foreign direct investment. One of the main features of outward foreign direct investment is the change in the spatial distribution of enterprises’ resources, which determines the status of location selection in investment decision. Not only is it a very important strategic decision, but also a key factor in the success of all the enterprises’ investment.This paper reviews the theoretical roots and related literature of the location selection of the OFDI firstly. Then analyzes the current situation of the location selection of China’s manufacturing industry OFDI, combined with the overall investment situation and the specific investment situation in Asia, Europe, Africa, other countries and regions of manufacturing industry, summarizes the present problems of location selection. Next, analyze some specific factors that influence the location selection of China’s manufacturing industry OFDI through theoretical and empirical research methods. Finally, combining with the current situation analysis, investment motivation of enterprises, theoretical and empirical analysis of influencing factors, put forward some suggestions to optimize the location selection of China’s manufacturing industry OFDI from three aspects, including the overall location selection model, the location selection of enterprises under different investment motivations, and the specific countermeasures.In the part of theoretical analysis of influencing factors, first, analyzes the three main motivations of China’s manufacturing enterprises to foreign direct investment, which includes: market seeking, resource seeking, technology seeking. Then, makes a comprehensive analysis on the influencing factors of location selection of China’s manufacturing industry OFDI from four aspects, they are the attraction of host countries, the promotion of investing country, enterprises themselves, and other influencing factors.In the part of empirical analysis of influencing factors, this paper selects 32 countries as research sample, collects seven variable data that represent the market size, the endowment of natural resource, the technical level, and the bilateral trade links, labor costs, infrastructure and geographical distance during 2007 to 2013, establishes panel data model to research the influencing factors. According to the investment motivations, this paper classifies the 32 sample countries into three types by clustering method, makes regression again to analysis the influencing factors of location selection of China’s manufacturing industry OFDI under different investment motivations. The regression result of all the countries shows that: the market size, the endowment of natural resource, technical level, infrastructure in host countries and bilateral trade links have a significant impact on the location selection, and shows a positive correlation. Both the labor costs factor and geographical distance factor couldn’t pass the significance test; After classification, the regression result shows that: for the type of market seeking enterprises, the market size, infrastructure, labor costs, geographical distance in host countries, as well as bilateral trade links have a significant impact on the location selection; For the type of resource seeking enterprises, the labor costs, natural resources, infrastructure in host countries, and geographical distance have a significant impact, however, the influence of geographical distance is inconsistent with expectation; For the type of technology seeking enterprises, the market size, technical level, infrastructure in host countries, as well as bilateral trade links have a significant impact.