The Study On The Influence Between The Processes Of Economic Institution Of Home Country And OFDI Based On The Perspective Of Space

Since the reform and opening up implemented,the economy of China is translating from a self-sufficient economy toward international and opening economy continuously.Especially after participating in the World Trade Organization,China is pushed by economic globalization and engaged in the international division of labor and the international exchange process.Economic globalization,at the same time,promotes the development of China's economy,capital,technology and information,thereby maximizing the allocation of resources in the global scope.Out Foreign Direct Investment(OFDI),as a significant power of the advance process of Chinese internationalization and the reason of the economy growth,has been appeal to numerous concerns in the academic field.Among tremendous factors that influence OFDI,institutional factors have been mentioned frequently in recent years.However,most of the literature only focus on the impact of the institution of host country rather than the influence of the institution of home country.While the government of China,compared with other countries,has a stronger and powerful regulation on macro economy.As a result,it is indispensable to consider the factor of the institution of homeland's function on the Chinese OFDI.Through the establishment of a spatial econometric model,this article introduces the impact on spatial effect to investigation and verify the impact of the institution of home country on OFDI,and then draws the corresponding conclusion and furthermore,puts forward the corresponding policy recommendations.Firstly,the article illustrates the situation of the process of Chinese OFDI in recent years,and then describes the development of both the Chinese OFDI and the relative homeland's institutions.On this basis,the article puts forward the problems and the significance of the research.Secondly,the article clarifies those documents related to the association between the institution of homeland and OFDI so that we can comprehensively understand the degree of the development of institution and OFDI.In addition,the text divides the economic institution into different parts,including financial system,trade system and fiscal system,combined with new institutional economics and then analyzes respectively,which provides readers with the access to understanding the mechanizations of these kinds of influences.In the empirical part,this paper uses spatial panel data model,through the selection of relative panel data of Chinese 30 provinces from 2004 to 2014 to research the relationship between OFDI and economic institution.The analysis results show that,in terms of the financial system,although there is no correlation between Chinese long-term loans and OFDI,the degree of the credit funds distribution and OFDI shows a positive correlation.The author believes that it is caused by capital flowsIn recent years,with Chinese real estate industry developing rapidly,as a result,long-term loans over flow of the real estate industry,and the support effect on OFDI has been very little,so long-term loans and OFDI don't exist correlation;however,a better and perfect credit system can decrease the cost of enterprises and share the risks of oversea investment,so as to improve the enthusiasm for enterprises to invest overseas.Therefore,the degree of the credit funds distribution and OFDI shows positive correlation.In addition,trade system has a positive correlation with foreign direct investment,which indicates that there is a promoting relationship between China's export trade and OFDI.To fiscal system,it has a negative correlation with OFDI,and in the author's perspective,there are two main reasons for this result.Firstly,due to low use efficiency of those government funds,governments have to sustain the unbalance between high inputs and low outputs;secondly,because of the deep regulation of government,the government occupies too much social resources and power which may therefore lead to an increasing in rent-seeking between local governments and enterprises,resulting in the reducing of market efficiency,and the decline in the international competitiveness of enterprise,which is not conducive to enterprises going out;Thirdly,excessive government spending and strong financial support may also eliminate the autonomy of enterprises,and make them more likely to adapt to the passive environment in the process of internationalization which may affect the international competition capacity of the enterprises,and inhibiting their enthusiasm of OFDI.In consequence,the author suggests that there are relationships between theinstitution of home country and OFDI.Combined with the Chinese situation and the empirical results,this paper puts forward the following policy suggestions:firstly,it is necessary to strengthen the construction of financial market innovation,and in the mean time,make the loan capital flows reasonable;secondly,government should vigorously promote policies that related to OFDI,and increase the establishment of to make full use of the promoting effect of export trade;last but not least,it is indispensable to increase the government support funds utilization efficiency and to create a loose regulation of government regulation.