The Study On The Relationship Between OFDI Entry Mode And Performance Of Chinese Enterprises

With the deepening and perfection of economic globalization and international division of labor,the increasingly opening of market and the liberalization of investment system,more and more enterprises believe that there are certain development limitations if relying solely on domestic resources,capital,technology and market.In order to break through the constraints of domestic resources and markets,more and more enterprises conduct outward foreign direct investment(OFDI)in order to obtain the market effect,resource effect and export effect.Especially after the implementing of "going global"strategy,more and more Chinese enterprises have explored the global market to seek sustainable development.OFDI will not only have an impact on China's economy,but also on the performance of parent company.Entry mode is one of the important strategic decisions for Chinese enterprises in conducting OFDI.On the one hand,enterprises choose either the greenfield investment or cross-border merge&aquisition(MA)as entry mode to conduct OFDI according to both enterprise characteristics and host country investment environment.Besides,different entry modes have their own comparative advantages,and influence companies' performance through the scale,R&D and other mechanisms.This paper focus on the choice of OFDI entry modes and performance of Chinese enterprises.Firstly,this paper reviews the existing literature research on OFDI,entry mode and enterprise performance,and summarizes the deficiencies of the existing literature.Secondly,this paper describes and analyzes the scale,industry and location characteristic of China's OFDI entry mode both in micro and macro perspective.Thirdly,this paper analyzes the comparative advantages of greenfield investment and cross-border MA,analyzes OFDI entry mode choice,its influence on enterprise performance and the influencing mechanism from the theoretical level,and proposes relevant research hypotheses.Then,taking the information of China's OFDI projects provided by bvd-zephyer and fDi Markets database as the research object,this paper conducts empirical analysis on the above three questions.Finally,this paper summarizes the research conclusions and provides relevant suggestions for enterprises to choose entry mode and improve performance based on the research conclusions.The main research conclusions of this paper are as follows:(1)The enterprises with larger scale,better performance and stronger R&D capability are more likely to adopt the entry mode of cross-border M&A(2)For the host country with larger market size and higher degree of intellectual property protection,the enterprises are more likely to adopt the entry mode of greenfield investment.(3)The performance of enterprises adopting the entry mode of greenfield investment is obviously better than that of enterprises adopting the entry mode of cross-border MA in terms of asset operation efficiency,asset quality and social contribution.In terms of solvency and developing ability,there is no significant difference in performance between different entry modes.(4)The degree of control,firm scale,operating time and R&D intensity have a significant moderating effect on the impact of entry mode on firm performance.However,due to insufficient experience in cross-border M&A of Chinese enterprises,the indirectly effect of entry mode on firm performance through capital intensity is not obvious.Compared with previous researches,this paper mainly conducts innovation in four aspects:research object,performance evaluation,endogenous treatment and mechanism research.Firstly,this paper uses the greenfield investment projects in fDi Markets database and the cross-border MA investment projects in BVD-zephyer database as samples,including the investment projects of both large?medium and small-sized Chinese multinational enterprises to avoid the problem of concentration of samples in industrial enterprises above designated size.Secondly,Secondly,this paper evaluates the performance of an enterprise from five aspects:operating efficiency,asset quality,solvency,development ability and social contribution,avoiding the one-sidedness of single performance indicator.Thirdly,this paper uses the system generalized methods of moment to deal with the endogenous problem between entry mode and firm performance,avoiding the ineffective regression results caused by ignoring this endogenous problem.Finally,this paper explores the mechanism of performance differences between different entry modes by constructing the interaction items from five aspects:control degree,enterprise scale,time effect,capital intensity and R&D intensity,expanding the breadth and depth of the research on relationship between enterprise entry modes and performance.