Analysis Of The Influence Of Institutional Factors On The Selection Of OFDI Models Of Chinese Multinational Enterprises

With the deepening of globalization,China's foreign direct investment has grown in size and its international status has gradually increased.In recent years,the total foreign investment ranking has ranked among the top in the world.However,the rise of trade protectionism in recent years has hindered the development of foreign direct investment by Chinese multinationals.In the market environment of different cultural traditions,customs,and legal systems,Chinese enterprises' foreign direct investment often faces an unsuitable dilemma,which is inferior to the host country's local enterprises.From the perspective of institutional differences between the home country and the host country,this paper explores the influence of institutional distance on the choice of multinational enterprises.First of all,this paper analyzes the institutional theory from the perspective of organizational sociology,and introduces the three dimensions of the system through the three pillars of Scott's system,namely,regulatory,normative and cognitive.Then,it sorts out the influence and inadequacies of the institutional factors appearing in the literature on the choice of foreign investment models.On the basis of relevant research,through the collection of the foreign investment mode of Chinese multinational enterprises and the data of the various dimensions of the host country in 2010-2016,the OLS regression model is mainly used to analyze the distance of the control system between the home country and the host country,the standard system distance and culture.The influence of institutional distance on the mode choice of Chinese multinational enterprises.Finally,the empirical analysis shows that the distance between the control system and the cultural system is significantly positively correlated with the cross-border mergers and acquisitions of Chinese enterprises.The standard system distance is negatively correlated with the cross-border mergers and acquisitions of Chinese enterprises,and the policies are given from the enterprise and government levels.It is suggested that enterprises should conduct multi-dimensional inspections of the host country's institutional environment to select the best entry mode,pay more attention to non-equity measures that can improve control,and establish a dynamic monitoring system to monitor the host country's institutional environment in order to respond flexibly;the government should learn from developed countries.Establish an international and standardized institutional system.Second,do a good job in supporting foreign direct investment of Chinese enterprises and protect the overseas rights and interests of Chinese enterprises.The results of this paper show that the distance between the regulatory system and the cultural system is significantly positively correlated with the investment model of cross-border M&A of Chinese multinational corporations.The standard institutional distance is significantly negatively correlated with it;secondly,compared with the control system distance and the normative system distance The institutional distance variable of the dimension and the cultural institutional distance have the strongest explanatory power for the choice of foreign direct investment mode of multinational enterprises.