The Influence Of OFDI On The Quality Of Export Products

The rapid growth of OFDI is a typical feature of China's economic internationalization process since the beginning of the new century.Large-scale OFDI has changed the single mode of China's enterprises participating in international competition mainly through export for a long time.Most of the existing studies focus on the trade creation effect of OFDI,but there is no clear conclusion on whether the transnational production mode actually improves the quality of export products and improves the status of Chinese enterprises in export competition.In view of this,this paper uses the large-scale micro data of Chinese industrial enterprise database,customs database and the list of enterprises investing abroad to make an empirical test on this problem.Firstly,we use the regression method to estimate the quality of Chinese enterprises' export products.Secondly,the overall effect of OFDI on product quality was tested by full sample general regression and PSM-DID double difference method.Then,the heterogeneity test has conducted by grouping the nature of enterprise ownership,mode of trade,and level of science and technology of the host country of investment Finally,the author studies the influence mechanism of OFDI on product quality through Goodman mediation testThe general regression of the whole sample shows that OFDI of export enterprises significantly improves the quality of their export products.However,because OFDI enterprises may have self-selection effect,that is,the investment enterprises themselves are strong and the quality of export products is high,so it is impossible to prove that OFDI has an impact on product quality.Therefore,in this study,PSM propensity score matching method was used to match the control group for enterprises investing in foreign countries,and DID double difference method was used for regression analysis to test whether there was a significant difference in product quality between the experimental group and the control group before and after the investment behavior.PSM-DID results show that after overcoming the sample self-selection effect,the OFDI behavior of enterprises still significantly improves the quality of export products.Then,according to the form of enterprise ownership,the mode of trade and the level of science and technology of the investment host country,it has found that the influence of OFDI on the product quality of enterprises shows obvious heterogeneity among different groups In terms of the form of ownership,OFDI of private enterprises has significantly improved the quality of export products,while OFDI of wholly foreign-owned enterprises and sino-foreign joint ventures has no significant influence on the quality of products,while OFDI of state-owned and collective enterprises has decreased after foreign investment.From the perspective of trade mode,OFDI behavior of enterprises engaged in general trade significantly improve the quality of export products,while the influence of processing trade enterprises is not significant.After the grouping regression of the host country's science and technology level,it has found that OFDI behavior of enterprises investing in high-tech countries can significantly improve the quality of export products.However,OFDI has a negative impact on the quality of export products if it invests in enterprises in low-tech countries.Finally,in order to further study the mechanism of China's OFDI affecting product quality,we conducted Goodman intermediary effect test.The study finds that there is an obvious intermediary effect in the R&D investment of enterprises.In other words,the reverse gradient OFDI of Chinese enterprises to high-tech countries affects their own research and development level by utilizing the advanced technological capacity or research and development conditions of the host country,so as to improve the quality of export products.The research results of this paper find that OFDI improves the quality of export products.OFDI has different impacts on the quality of export products in different forms of ownership,modes of trade and the level of technology of the host country.China's reverse OFDI affects the quality of products by influencing the R&D input of enterprises.From the perspective of policy,in order to further improve the international competitiveness of Chinese enterprises and realize the sustained and stable development of foreign trade from quantitative growth to qualitative improvement,government departments should support and encourage enterprises to conduct foreign direct investment,so that enterprises can improve the quality of export products through foreign investment strategy.For micro business entities,enterprises should take the initiative to participate in OFDI,and pay attention to the technological level of the host country when investing,and more choose to invest in countries with high scientific and technological development level.Enterprises should improve their research and development level and innovation ability in investment,promote the quality upgrading of China's export products through OFDI's reverse technology spillover,and ultimately realize the mutual promotion and common development of capital and products.