The Influence Of Bilateral Political Relations On Chinese Enterprises' Outward Foreign Direct Investment

The development of foreign direct investment(FDI)is particaularly important for China's economic growth and industrial restructuring.Often in developing countries in the process of foreign direct investment is considered a lack of ownership advantages,and bilateral political relations is to protect developing countries,an important factor in foreign direct investmcent.Now the global situation is in the direction of multi-polarization,countries began to change the diplomatic policy,the use of some "soft means" to safeguard their economic intrests.In order to further promote China's enterprises to "go out",China's Tuse of foreigrn "soft means" will be of great significance,political leaders,will also give a new mission of mutual visits.In the literature on the factors influencing the location choice of China's foreign direct investment,it is often not enough to pay attention to the important role of the government in foreign investment,but also neglect the important influence of bilateral political relations.The 18th National Congress has repeatedly stressed that it is necessary to enhance the governance capacity of the govenment The governance is divided into governance within the state and external governance,and diplomacy is a manifestation of external governance.This paper takes the bilateral diplomatic activities represented by quantitative high-level visits and a series of political conflicts arising from the two sides.That will provides a new perspective to study the influencing factors of China's foreign direct in vestment as well as supplement the existing theoretical system.Based on the investment data of OECD countries fom 2005 to 2014,this paper uses the panel Logit model of random effect,measuring the bilateral political relations with four major indicators,namely,high-level reciprocal visits,the establishment of diplomatic relations,friendship cities and bilateral conflicts,and examines the impact of bilateral political relations on China's foreign direct investment.It is found that good bilateral political relations will promote the entry of Chinese enterprises,and bilateral political conflict will significantly inhibit the enterprise OFDI.Among them,the four indicators of bilateral political relations have different effects on state-owned enterprises and non-state enterprises.The impact of high-level leaders' visits often can bring state-owned enterprises more "going out" opporttunities,and high-level leaders' visits have little impact to the investment of non-state-owned enterprises,non-state-owned enterprises more concerned about the indicator of friendship cities;The effect of Bilateral political relations on the enterprises with investment experience is not significant,the enterprises without investment experience will pay more attention to bilateral political relations;Moreover,there exist market and resources seek motivation in China's investment to OECD countries,and the level of tax burden of host country has a significant inhibitory effect on OFDI in our country.In today's complicated political and economic situation,the foreign direct investment of enterprises use the protection mechanism of good bilateral political relations and establish the early warning mechanism of bilateral political relations so as to prevent the deteriorating political relations from bringing risks to the enterprises' investment.Good at using rather than completely dependent,while paying attention to enhance our country's own ownership advantage as well as industrial competitive advantage.The government should also use diplomatic means for our enterprises to "go out" and provide a hamonious stable international environment and the most favorable conditions.The innovation of the text is as follows:(1)The article uses several quantitative indicators to measure bilateral political relations,to explain our unique OFDI and provide a useful perspective.(2)This article is grouped according to the ownership attribute of the enterprise and whether there is any investment experience.Consider the impact of bilateral political relations on different types of enterprises.These are the areas where scholars have never been subdivided.(3)Thispaper is more aimed at studying China's investment in developed economies.