Research On The Impact Of Factor Price Distortion On Chinese Enterprises' Outward Foreign Direct Investment

With the progress and deepening of reform and opening up,China's economic system has gradually completed deepening reforms,and the overall economic strength has been greatly improved.The rapid development of a large number of enterprises has enabled them to expand their overseas businesses,so foreign direct investment has been able to Continued steady growth.In recent years,developing countries represented by China have gradually developed in foreign direct investment,especially China's foreign direct investment has developed rapidly.The basic theory of the past can explain the foreign direct investment behavior of developed countries,but for some emerging investment behaviors,it is difficult to fully explain the traditional "monopoly advantage theory" and "absolute advantage theory".In addition,the academic community has paid more attention to the development of China's foreign direct investment.Most scholars mainly analyze the host country factor,the home country factor and the host country and the home country bilateral factors,including the host country system environment,natural resource endowment,location.Conditions,etc.,the level of technology in the home country,government participation,resource needs,etc.,as well as institutional differences and cultural distances.The above factors on the factors affecting China's foreign direct investment have not yet explicitly touched the factor of factor price distortion.At the same time,the literature on the distortion of factor prices is rarely involved in the field of foreign direct investment of Chinese enterprises.Therefore,this paper attempts to study the relationship between factor price distortion and whether Chinese enterprises will make foreign direct investment and the strength of OFDI through theoretical and empirical analysis.This paper combs the domestic and foreign research literature on factor price distortion and corporate foreign direct investment,and discusses the mechanism of the impact of factor price distortion on corporate direct investment.Specifically,on the one hand,factor price distortions will promote foreign direct investment behaviors by avoiding trade frictions,transferring excess capacity,and acquiring resources from other countries.On the other hand,factor price distortions have reduced corporate productivity,which is not conducive to the occurrence of its foreign direct investment behavior.On this basis,the Heckman two-stage model is used to verify the mechanism of the effect of factor price distortion on Chinese enterprises' foreign direct investment.The empirical results show that in the overall sample,factor price distortion will positively affect the decision-making and intensity of Chinese enterprises' foreign direct investment.That is to say,when there is price distortion in the factor market,the tendency of enterprises to choose foreign direct investment decision-making and the intensity of foreign direct investment will increase with the degree of distortion of factor prices.After the sample is tested for robustness,it is found that factor price distortions have different characteristics for different industries and enterprises with different ownerships.The specific realization is: from the perspective of the industry attributes of enterprises,non-technical intensive enterprises are investing in foreign direct investment.Decision-making and strength improvement will be positively affected by factor price distortion,while technology-intensive enterprises' foreign direct investment decision-making and intensity will be negatively affected;from the perspective of enterprise ownership,when the factor market is distorted,the strength of foreign direct investment of state-owned enterprises can be positively increased with the degree of distortion.For non-state-owned enterprises,their foreign direct investment decisions and intensity will be negatively affected by factor price distortion.Based on the above conclusions,this paper proposes policy recommendations for accelerating the marketoriented reform of production factors and guiding Chinese enterprises to make scientific decisions and take the initiative to conduct foreign direct investment from the perspectives of enterprise innovation and factor market reform.