Study On Risk Prevention Of Technology Sourcing Outward Foreign Direct Investment Of Enterprises In Beijing

With the development of science and technology globalization, more and more multinational corporations choose to integrate global technological resources and form competitive advantage based on global research and development network.Meanwhile,because of the contradiction of technical requirements and lack of resources for research and development, multinational corporations of developing countries have to go outside to seek technological resources.As Beijing is one of the main gathering place for high-tech enterprises in China,it also keep looking for means to enhance the level of industrial technology and competitive advantage through technology sourcing outward foreign direct investment(OFDI).However,in this progress,the companies have to deal with the risks from international political and economic environment as well as cultural differences.Morever,the change of technical resources will lead to uncertainty of the results of research and development overseas.Therefore,the authors study on risk prevention of technology sourcing OFDI of companies in Beijing and make resonable suggestions for them.There are three main aspects of this paper as follows:Firstly, investigate the technology sourcing OFDI of Beijing companies and sum up the investment characteristics which include scale features,location and industry selection, entry mode.Then explain the meaning and causes of risks of technology sourcing OFDI,such as political,economic,cultural and technological risks.So as to set base for the following study.Secondly,make a quantitative assessment on risks of technology sourcing OFDI of companies in Beijing.Through using principal components analysis and cluster analysis to get each host countries’annual risk score and leve,we can find that some countries’political and economic environment is better, but they are lack of technical resource s.Other countries are the onthecontrary. Morever,developed countries all have low risk in our sample and high risk countries are developing.Finally,use the above quantitative results of risk as early warning output values of neural net workmodel.Afte training the model, we can predict the risk of sample countries. Then make judgments and determine the level of risk including safety, basic safety, warning, danger.The early warning results show that United States and Japan are safe and they are the main location choice of Beijing companies’ technology sourcing OFDI.There are four countries are in danger, which include Brazil,India, Mexico, and Russia. Through the identification, quantitative assessment and early warning of risks, companies can make timely detection alarm and focus on countries in danger and alert risk level.Therefore,we suggest that enterprises should set up a scientific risk assessment and early warning system and develop flexible measures to prevent risks,such as buy insurance for countries with high political risk, seeking cooperation with local companies or universities, chosing local investment and financing institutions carefullyand so on.