Study On Influence Factors And Potential Of The Outward Foreign Direct Investment

With the "economic globalization" trend strengthened,the total foreign direct investment continues to grow.Among them,foreign investment in developed countries has been leading in developing countries,which reached $636.8 million in 1998,14.86 times the gap between them when compared to $428.6 billion in developing countries.In recent years,the gap gradually becomes narrowing.In 2014,foreign direct investment was $468 billion in developing economies,an increase of 23% over the previous year,while $823 billion in developed economies,the data was declining compared with $833.5 billion in 2013.On the regional distribution of foreign investment,the proportion of investment flowing to developing countries was also growing,record inflows in 2014,up to $681 billion.In the investment sector,FDI flowing to the service sector is rising,reaching 63% in 2014 and relatively more stable than manufacturing and primary industries,which accounted for almost 2.5 times more than the manufacturing sector(26%),9 times than primary industry(7%).Based on the data of home country,in particular to explore the determinants of different economies.Firstly,on the quantitative method to analysis the main factors affecting the country's foreign direct investment by using 1996-2014 panel data of foreign direct investment in 30 represented countries.The study found:the level of economic development of the home country has a significant role in promoting investment in its overseas;the impact of trade openness with export share of GDP is small;iron ore,the representative imported natural resources and the share of research and development expenditure of GDP is positively correlated with OFDI.This empirical results show that the economic strength of the country and natural resources deeply affect OFDI,while openness to trade affect less.Then this paper proposes policy recommendations to promote foreign direct investment in countries such as: keep developing to enhance the comprehensive national strength,the rational use of foreign natural resources,some reference significance applies to foreign direct investment in China.The article also cites the potential index for OFDI and other key indicators to study the prospects such as foreign investment performance,foreign investment stage,the saving-investment gap and foreign exchange reserves.We found: overall potential of developing countries is rising,on the contrary,it has declined in developed country.But still many issues make this potential very difficult to play,a country's overall insufficient economic strength,inadequate domestic infrastructure ect.So this paper presents comprehensive national strength,improving domestic infrastructure to further tap this potential.