Research On The Location Selection Of Telecommunication Operators' Outward Foreign Direct Investment

With the arrival of economic globalization,a large number of industries are injected into new impetus,including the telecommunication industries.Telecommunication Operators,which dominate this industry are also experiencing growths bit by bit through decades of international business exploration.Foreign direct investments,the most important way to expand the international business,are more and more welcomed by the operators in recent years.This paper starts with the current situation of foreign direct investments of global telecommunication operators,and focuses on the location selection of telecommunication operators in the process of foreign direct investments.At first,this paper analyzes the general situation of global telecommunication operators.The European operators:Vodafone,Deutsche Telekom,Telefonica,and Chinese operators:China Mobile,China Unicom,China Telecom are selected as the main targets.In addition,the three motivations of foreign direct investments are extracted.They are:market seeking,efficiency seeking and strategic cooperation seeking.On this basis,this paper analyzes the four influencing factors of telecommunication operators' choice of foreign direct investments based on the related theories and literatures:the size and growth potential of host country market;the distance of the investment enterprises and the host country;the host country's foreign economic situation and the characteristics of the host country's telecommunications.In order to further illustrate the four factors,12 specific standards are selected:the host country's GDP,population,Net income,the final consumption expenditure on average,(which shows the size of the host market and the growth potential factors),cultural distance and geographical distance(to explain the distance factors between the investment enterprises and the host country),the actual effective exchange rate index of the host country,net foreign direct investment,The percentage of trade volume in overall GDP(indicating the host country's foreign economic situation factors),the host country's telephone lines,the number of Internet users,ICT products accounted for the proportion of total imports of products to illustrate the host country telecommunications characteristics.In the next stage,this paper constructs a logistic regression model.The 12 sub-indexes are used as explanatory variables to select 35 cases of foreign direct investments by operators in recent years.Through the analysis of the logistic regression model,it is found that there are six sub-factors making positive or negative effects in the selection of foreign direct investment in telecommunication operators.The sub-factors with high significant level are the GDP of the host country,the total population,Per capita adjustment of national income,cultural distance,telephone lines,Internet users,the proportion of ICT products accounting for total imports.Finally,this paper combines the results of empirical analysis,offering three reasonable proposals for the telecommunication operators:researching a reasonable district for foreign direct investments,choosing a suitable way to enter the district and building a telecommunication eco-industrial chain.