Confucianism And Outward FDI

In the past,the mainstream theory of foreign direct investment was mainly used to explain the international development of developed countries,and it is difficult to explain the special internationalization process of emerging economies.Based on this,a group of studies on the impact of the special institutional environment of emerging economies on outward foreign direct investment of enterprises came into being.However,there is no literature study on the impact of informal institutions-religion on outward foreign direct investment.Confucianism influenced the valuesand behaviors of the Chinese people for a long time.Regardless of the individual's religious beliefs,it will affect the decision-making of company.Therefore,it is important to consider the influence of Confucianism on the Long-term strategic decision.Based on the data of outward foreign direct investment of Chinese listed companies from 2003 to 2013,this paper examines the influence of Chinese traditional culture-Confucianism on the behavior of outward foreign direct investment.We join the resource dependence theory and the social relations theory to explain how and whether Confucianism has an important impact on outward foreign direct investment,as an informal system.This paper further considerate whether Confucianism plays different roles in different levels of institutional development,areas of market competition,and different types of enterprises.This paper finds that Confucianism has an important impact on outward foreign direct investment:(1)Deeper influenced by Confucianism,the Enterprises are less likely to make outward foreign direct investment.The dependence of social relations under Confucianism can reduce the transaction costs and operational risks of enterprises,which reduce the willingness of enterprises to make foreign direct investment.(2)Institutional development can moderate the relationship between Confucianism and outward foreign direct investment.Confucianism has a weaker impact on outward foreign direct investment of enterprises in areas with higher levels of institutional development.(3)Market competition has no obvious effect on the relationship between Confucianism and outward foreign direct investment.In a highly competitive market,Confucian's "guanxi" may reduce the effectiveness of information which may bring more redundant information.However,Confucian's"guanxi" may also provide more convenience and policy support,which reduce the competitive pressure of enterprises.So the moderate effect of market competition is not obvious.(4)The type of the enterprise can moderate the relationship between Confucianism and outward foreign direct investment.Compared with non-state-owned enterprises,the influence of.Confucianism in state-owned enterprises is weaker.(5)This paper further measures outward foreign direct investment by using dummy variables,and finds that Confucianism will decrease outward foreign direct investment and the type of the enterprise positively regulates the negative correlation between Confucianism and outward foreign direct investment,and the moderate effect of institutional development has not been supported,but it is basically consistent with the findings of this paper.The main innovation of this paper is to expand the research of the influence of religious on corporate behavior,and transfer the research perspective to outward foreign direct investment to make up for the shortcomings of previous research.Second,Confucianism,as a traditional Chinese culture,has influenced the values and behaviors of Chinese people for a long time.This paper contributes to study the influence of Confucianism on enterprises in the context of China.Third,the research in this paper also supplements the previous research on informal institutions.This paper examines the impact of Confucianism on the decisions of outward foreign direct investment and explains the importance of informal institutions in emerging economies.Fourth,this paper join resource dependence theory and social relations theory to explain the influence of social relationship dependence under Confucianism on outward foreign direct investment.It is an extension of existing research on resource dependence theory and social relationship theory.It is also an interpretation mechanism for the current use of Confucian cultural relations.The shortcoming of this paper is to use the variables of Confucian based on geographical proximity to capture the Confucian atmosphere of the company's registered address,and the measurement is not accurate enough.Secondly,this paper only focuses on the Confucian cultural center at the national level,and does not comprehensively examine the impact of all Confucius Temples on enterprises,and also decrease the accuracy of the results.