A Study On The Influence Of Chinese Firm Productivity On The Choice Of OFDI Entry Mode

Under the strategic framework of “The Belt and Road Initiative”,the Chinese government encourages enterprises to "go global".However,enterprises are faced with high investment costs and operational risks in their foreign investment,and they need adequate financial support from financial institutions.As a matter of fact,Chinese enterprises' OFDI activities are still in the early stage and the experience they can learn from is very limited.The heterogeneity of productivity has a great influence on the choice of OFDI mode,but there are few studies on the relationship between productivity and OFDI mode.Therefore,this paper will focus on the influence of the heterogeneity of enterprise productivity on the choice of OFDI mode and the moderating effect of financing constraints faced by enterprises.From the perspective of heterogeneous trade theory,this paper first summarizes the basic law of the impact of enterprise productivity on OFDI entry mode through mathematical model,and then introduces financing constraints on this basis.It is concluded that financing constraints improve the productivity threshold for enterprises to choose overseas mergers and acquisitions or green land investment.Then,based on panel data of A-share listed companies in China from 2010 to 2015,a Logit binary discrete model is established to analyze the impact of heterogeneity of enterprise productivity on the entry mode of OFDI.On this basis,the regulatory role of financing constraints is tested.The results show that: firstly,the higher the productivity of enterprises,the more likely they will choose the way of overseas M&A to enter the international market.However,low-productivity enterprises tend to choose new investment models to enter the international market.Secondly,the influence mechanism of productivity varies in different regions/industries,and the influence of productivity of enterprises in eastern region or manufacturing industry is more significant.Third,financing constraints weaken the role of enterprise productivity in OFDI mode selection.Finally,based on the research conclusions,some policy implications and suggestions are drawn to provide a reference basis for enterprises to make international decisions and help the government to provide effective policy guidance for investment enterprises.