The Analysis Of Driving Factors Of Foreign Direct Investment And The Enlightment For Chinese Enterprises

By the end of2013, Global newly added foreign direct investment had reached1.45trillion US dollars, and the size of FDI-stock had reached25.46trillion US dollars. As the development of the economic globalization, the expending of foreign direct investment has become an important indicator of an economy. The foreign direct investment of Multi-National Corporations are influenced by many factors, which are not only driven by the enterprise itself, but also by the policies and national strategies of the home country, and the location advantages of the host country also have a stimulating effect on the investment choice. Therefore, the research of driving factors of foreign direct investment not only has theoretical value, but also has practical significance.This study on the previous analysis of FDI factors are summarized in two aspects: the push effect of the home country and the pull effect of the host country. In the aspect of the push effect, there are three main factors, resource, industry and system, which including the driving effect of the enterprise itself, and the influence from the home country’s policies and national strategies. The resource factor includes not only natural resources, but also international business experience, international market space and advanced skills in management, which are usually difficult to obtain in the home market for the backward enterprise. Industrial factor includes endowments, market demand, the support of related industries and competitors. When the development of domestic industry is unfavorable, enterprises may tend to seek development through the overseas market. The system factor includes the guiding role of government, ethnic and cultural convergence, as well as domestic investors entrepreneurship. Because of the high risk of FDI, more aggressive entrepreneurs tend to push outward direct investment.Pulling factors of the host country includes political environment, economic development, resource endowment and location etc.. The host country caters to the needs of the Multi-National Corporations in these areas, which will affect the choice of investing. Companies often prefer a stable macro social environment, good infrastructure, and abundant natural resources. The cost of investment is lower when two countries are closer, as transporting and information communicating are more convenient. Enterprises in the selection of FDI location, may only tend to the advantage of one aspect, while ignoring the influence of other factors.At last, combining with the special situation of Chinese enterprises are analyzed, pointed out that the lack of Chinese enterprises in foreign direct investment process, and put forward some suggestions for improvement.