Financing Constraint,Corporate Governance And Outward Foreign Investmen Of Chinese Enterprise

Since the 1990 s,China has vigorously promoted opening to the outside world and attracted foreign investment.At the same time,it has also actively encouraged enterprises to do OFDI.By 2015,China's OFDI has exceeded its inflow,and China has become a net capital exporter country.China's “going out” strategy is steadily advancing,but we must take note of the problems hidden under the development.Enterprises need external financing to carry out OFDI,then companies are facing different degrees of financing constraints,and at the same time,the Chinese market is still at a low level,and the market efficiency is low.In this situation,the financing constraints will become the problem that the enterprise must face.In addition,China's unsound company system and laws and regulations have led to prominent agency problems,and the inconsistent interests of enterprise managers and owners have a huge impact on enterprise decision-making.The importance of corporate governance to corporate OFDI is highlighted here.This paper examines the impact of financing constraints and corporate governance on the corporate OFDI propensity.This article relies mainly on new-new trade theories and principal-agent theory,combined with the analytic method of corporate finance,introducing financing constraints and corporate governance into trade theories to conduct research on international trade issues.This article has a characteristics of cross-cutting between international trade and finance.Based on the above theories,this paper explores the influence mechanism of financing constraints and corporate governance and their interactions on OFDI of enterprises,and provides support from the trade level for China's market system reform and direction of corporate development.This article takes a sample of 628 listed companies that have conducted OFDI from 2004 to2013,and uses a combination of quantitative analysis and qualitative analysis to study the impact of financing constraints and corporate governance on corporate OFDI.The research results show that the financing constraints that companies face will significantly reduce the OFDI tendency of enterprises.The share of state-owned shares and salary of managers will have a negative impact on OFDI of enterprises.The degree of ownership concentration,the proportion of independent directors and the shares held by managers will have a positive effect on company's OFDI.As for the interactions,the proportion of state-owned shares can significantly reduce the negative impact which was from credit financing constraints,while the fixed salary of managers will increase the negative impact from corporate financing constraints.Board of directors scale and board of supervisors scale have no significant effect on the OFDI of enterprises.Based on the research results,this paper believes that,in the first place,China needs to establish a sound and efficient market and improve the effectiveness of the financial market so that it can reduce the company's financing constraints as a whole.Second,improve the laws and regulations of corporation and make sure that directors and supervisors can use their rights properly,and reduce agency problems of the company.Third,companies need to choose a suitable corporate governance structure,not only to make decisions efficiently,butalso to take into account the company's operations and performance.Fourth,continue to improve the incentive system so that the interests of operators and owners tend to consistent,so ti can reduce agency problems and enable the company to develop healthily.