The Impact Of Financing Constraints On Chinese Private Enterprises' OFDI

Since the 21st century,China's outward foreign direct investment(OFDI)has gradually entered the period of rapid growth.As of 2016,it has become the second-largest country in global flow scale.The main structure of OFDI used to be fundamentally dependent on state-owned companies,which turned to integration of state-owned,non-state-owned and private enterprises.Private enterprises have their own characteristics of being non-politicized and easily accepted by foreign markets,which makes them occupy an important strategic position in the development of overseas investment in China.Private enterprises have huge space and momentum for the development of foreign investment.However,enterprises usually need strong financial support for OFDI.Under the background of the development of financial market,there are still many impediments,private enterprises are obviously low in the ability to obtain external financing and are subject to many restrictions.Financing constraints are likely to restrict the development of foreign investment of China's private enterprises.Therefore,from the micro-enterprise level,this paper explores the characteristics of private enterprises' foreign investment,summarizes the current situation of private enterprises,financial constraints and its impact on OFDI,and puts forward relevant feasible policy suggestions in view of the problem.It will exert an important guiding significance over promoting the development of OFDI in China's private enterprises.This paper firstly reviews the related concepts of financing constraints systematically and their impact on the internationalization choice of enterprises,and summarizes the relevant theoretical basis.Secondly,it elaborates the current situation of foreign direct investment of private enterprises in China and causes of financing constraints.Thirdly,it analyzes the impact mechanism of financing constraints on OFDI on the theoretical level and puts forward the hypothesis of this study.Finally,this paper uses the panel data of private listed enterprises in China from 2003 to 2015 and uses probit and logit models comprehensively to test the impact of financing constraints on OFDI.It not only makes quantitative regression analysis on the whole sample data,but also considers the factors of productivity heterogeneity and industry difference.The effects of financing constraints between enterprises with different productivity levels and industry characteristics are compared and analyzed.The main conclusions are as follows:Firstly,financing constraints are one of the key factors that restrict Chinese private enterprises' OFDI behavior.The more serious the financing constraints,the less inclined they are to make OFDI.Secondly,the higher the productivity of private enterprises,the more they tend to invest in OFDI,the more significant impact of financing constraints is exerted on their OFDI.Thirdly,compared with enterprises in the industries with high dependence on external financing,financing constraints have a more significant impact on private enterprises in the industries with low dependence on external financing.In view of the above research conclusions,this paper puts forward relevant policy recommendations from the actual situation's level.As for the innovation aspect of this paper,it mainly includes the following two points.Firstly,on the index measurement of financing constraints,this paper uses the multiple indicators of enterprises to construct comprehensive variables which includes eight sub-indicators in the four categories,namely,internal financing,external financing,commercial credit constraints,investment opportunities and profitability,which are to measure the financing constraints of enterprises.Thus,the financing constraints of enterprises can be measured more comprehensively and accurately.Secondly,based on the consideration of reality,this paper takes the private enterprises as a separate research object,analyzes the current situation of its OFDI and the financing constraints faced by it.Furthermore,considering the update of data,timeliness and accuracy of indicators and other factors,this paper selects the data of private listed enterprises in CSMAR from 2003 to 2015 as the research sample.Whether from the sample indicators or time,the research conclusions are more universal.There are still some shortcomings despite the innovation based on the existing studies.Based on the research perspective,data characteristics and data quantity,this paper only measures the influencing factors at the level of Chinese enterprises without taking into account of the macro-factors of the target countries invested by the investment behavior enterprises.And in the control of endogenous problems,this paper only adopts the common approach,delaying the financing indicators to avoid and deal with it,and does not screen out the sample data that only considers the company's first foreign direct investment behavior for detailed analysis.The relevant research can still be further studied.In addition,due to the availability of data,this paper does not deal with unlisted private enterprises,and the extent of the impact of financing constraints on these enterprises also need to be further explored and studied.