Research On The Political Risks Of State-owned Enterprises' Foreign Direct Investment

After the reform and opening up,China began to try to make ofdi.In the process of China's overseas investment,state-owned enterprises have played a pillar role.Through the stages of starting,exploring and diversifying investment,China's state-owned enterprises have made great progress and remarkable achievements in the field of overseas investment,and made outstanding contributions to China's economic development and foreign strategy.But with that comes the question of political risk.Compared with private enterprises,state-owned enterprises need to enter into countries with high political risks,and their status is more sensitive.Based on previous cases,the political risks encountered by Chinese state-owned enterprises in overseas investment are summarized as follows: political environment replacement,terrorism and violence threat,war,host country discriminatory laws and regulations and other factors.According to dunning's eclectic theory of international production,the factors influencing enterprises' willingness to invest in the host country include economy,resources,politics and system.Due to its characteristics of suddenness,coerciveness and great harmfulness,political risk has become an important factor influencing the overseas investment of state-owned enterprises in China.This paper defines political risk by reviewing the previous literature and classifies the specific political risks encountered by state-owned enterprises in the process of ofdi.A panel model was constructed using investment data from 63 countries(regions).Empirical study of political risk and other factors on China's state-owned enterprises overseas influence.The results show that political risk significantly reduces the willingness of state-owned enterprises to invest in host countries.China's state-owned enterprises tend to invest in countries with imperfect infrastructure and low trade dependence.At the same time,state-owned enterprises have a strong sense of seeking natural resources and strategic resources,while human resources have no significant impact on the ofdi of state-owned enterprises in China.In the investigation of the sub-indexes of political risk in the host country(region),it is found that except the military's participation in politics,ethnic conflicts and democracy degree is not significant,the other sub-indexes of political risk all inhibit the ofdi of China's state-owned enterprises.Finally,based on the analysis of the types of political risks encountered by state-owned enterprises overseas and the empirical results,the paper puts forward specific operable policy Suggestions at the national and enterprise levels.