Research On Redundant Resources,Corporate Governance And Enterprises' OFDI Decisions

With the development of the world economy,outward foreign direct investment has become more and more prominent in China's economic development and national strategy.By the end of 2016,China became the world's second largest foreign direct investment country again,whose Outward foreign direct investment reached a record high.But the international environment is complex and unpredictable,companies need to be able to cope with the risks posed by this situation.Therefore,when companies decide OFDI,in addition to considering external factors,they also need to consider their own characteristics and abilities.Corporate governance is necessary for enterprise to make decision,but the problem of "a single big one" is widely exist in China listed company,the interests of big shareholders and minority shareholders are the main problems of corporate governance.Equity concentration represents the concentration of the the shareholding of large shareholders,and institutional investors,as spokespersons for minority shareholders,represent the interests of minority shareholders,so the corporate governance in this paper mainly refers to the concentration degree of equity and the shareholding of institutional investors.Besides,the implementation of enterprise decision cannot be carried out without the support of enterprise resources.Redundant resources are considered to be the "buffer" of enterprises,which can help enterprises cope with changes in the environment.In order to better clarify the role of corporate governance and redundant resources in the outward direct investment of enterprises,This article divides OFDI decision in three phases,namely OFDI or not,the amount of OFDI and the modes of outward direct investment,detailing the core issues “the relations of the corporate governance,the redundant resources and enterprises' OFDI “,through concept definition,theoretical review,literature review,statistical analysis,empirical results analysis and discussion,and practical revelation.In particular,firstly,this paper summarizes the research status of influencing factors of outward foreign direct investment in enterprises,then,focuses on the research review of equity concentration,institutional investors' shareholding ratio and redundant resources.Secondly,this paper takes the Shanghai and Shenzhen a-share listed companies as the research objects to carry out the empirical analysis in three stages.In the first decision-making stage,using Probit model to carry on the empirical analysis,researching the effect of ownership concentration,institutional investors holding and redundant resources on OFDI or not.In the decision-making stage of the amount of OFDI,this paper uses Negative Binomial regression analysis to research the influence of ownership concentration,institutional ownership and redundant resources on OFDI,and to explore the regulating effect of redundant resources.Further based on the enterprise value chain to classify OFDI,learning of relation of the ownership concentration,institutional investors holding,redundant resources and OFDI.Finally,the following conclusions are drawn: Firstly,the concentration degree of equity is inverted "U" relationship with OFDI,which is also the same with the amount of OFDI.Secondly,institutional investor holding can positively affect enterprise OFDI and the amount of OFDI.Thirdly,the sedimentary redundant resources and non-precipitous redundant resources can significantly promote enterprises' s OFDI tendency.Fourthly,in the decisionmaking process of the amount of OFDI,only the precipitation redundant resources show significant direct impact and negatively affect the OFDI amount.nonprecipitous redundant resources play the role of regulation,namely,the nonprecipitous redundant resources have negative conditioning on the inverted "U" type of relationship between the equity concentration and the amount of OFDI.Fifthly,the companies,highly centralized or highly fragmented,high shareholding enterprise,and institutional investors,tend to choose trade sales type OFDI,while settling the more redundant resources enterprise,more likely to choose the researching and processing type OFDI.In addition,this paper finds that the system distance,Chinese network,investment experience and so on can promote the enterprises to expand the outward direct investment to a certain extent.Finally,the article,according to the results of the analysis,puts forward relevant policy suggestions from the angle of the state and enterprises to promote enterprise OFDI that,the state should be extended appropriately in corporate finance condition,and to encourage the non-state enterprises OFDI,and enterprises should combine their own characteristics,and fully consider the related factors,to make decisions rationally,avoid blind investment.Different from previous macroscopic studies,this paper innovatively takes the corporate governance and organizational redundancy in the research of companys' OFDI,further improves the theory of OFDI.