The Influence Of OFDI On The Capacity Utilization Rate Of Chinese Enterprises

Since joining the WTO,China’s economy has continued to develop healthily,corporate innovation has continued to advance,industrial structure has continued to optimize,and corporate capacity utilization has also increased rapidly.However,in 2008,due to the deep-rooted influence of the international financial crisis,China’s foreign trade was seriously frustrated,and the domestic and international markets continued to slump.The contradiction between supply and demand in some industries in China has become increasingly prominent.In particular,in some traditional manufacturing industries,the production capacity is generally overcapacity,and large-scale production capacity cannot be effectively released.This has led to a new round of overcapacity.With the implementation of China’s “One Belt and One Road” cooperation initiative and “going out” strategy,it is necessary to strengthen external capacity cooperation,expand foreign direct investment has become an effective new way to resolve overcapacity in China’s enterprises.Firstly,based on the latest available data,this paper analyzes the current situation of Chinese OFDI,and sorts out the formation process and risk characteristics of overcapacity in Chinese enterprises.Then,based on the product life cycle theory,the marginal industry expansion theory,and the international production eclectic theory to structure analysis framework,trying to explore the mechanism of how OFDI affecting excess capacity.At the micro level,according to the purpose of OFDI,listed companies are divided into resource seeking,market seeking and technology seeking.This paper analyzes the sources of motivation for enterprises with different investment types to increase capacity utilization through OFDI.On the macro level,from the three aspects of industrial transfer effect,industrial correlation effect and intra-industry competition effect,the internal mechanism of foreign direct investment affecting the capacity utilization rate of enterprises may be studied.This paper quantifies the impact of foreign direct investment on the capacity utilization of enterprises from the micro-enterprise level.Trying to explore whether the capacity utilization rate of listed companies has increased and improved after conducting foreign direct investment from a global perspective.First,use the 2010-2015 “Investment List of Overseas Investment Enterprises(Institutions)” to match the public data of A-share listed companies in Shanghai and Shenzhen Stock Exchanges,and use the propensity score matching method(PSM)to find available comparisons for OFDI enterprises.The control group eliminates the “self-selection effect” that may occur in enterprises’ foreign direct investment decisions and avoids sample selection bias.Then the difference in difference test is performed on the matched processing group and the control enterprise to eliminate the possible missing variable problem.That is,the PSM-DID method is used to further measure the impact of OFDI and other control variables on the capacity utilization rate of enterprises.Through the theoretical and empirical research of this paper,first of all,the OFDI of listed companies in China can significantly improve their capacity utilization.Secondly,the overcapacity of enterprises with excess capacity after OFDI is greater than that of non-capacity enterprises.Third,non-state-owned listed companies are more effective than state-owned listed companies in using foreign direct investment to increase capacity utilization.Finally,the positive effect of increasing capacity utilization rate of listed companies in the countries along the Belt and Road Initiative is comparable to that of countries(regions)along the nonBelt and Road.Finally,based on theoretical and empirical analysis,this paper puts forward relevant opinions and suggestions on improving the capacity utilization rate of China’s listed enterprises and improving the scale of outward foreign direct investment,including the government should guide enterprises to go out and release the vitality of state-owned enterprises and non-state-owned enterprises.Increase investment in research and development to promote technological upgrading of enterprises.