Research On OFDI Mode Selection Of Chinese Private Enterprises

Since joining the World Trade Organization,China has gradually integrated into the international market.Economic globalization has brought opportunities for China to direct investment.Multinational corporations have achieved unprecedented development.In the past few years,state-owned enterprises have been dominant in foreign direct investment.With the promotion of “the Belt and Road Initiative” construction and other policies,more and more private enterprises have gone abroad and entered the international market.In 2017,the proportion of private enterprises in China's foreign direct investment exceeded that of state-owned enterprises for the first time,and foreign direct investment in private enterprises.At the same time as the increase in “quantity”,the same level of “quality” improvement did not keep up.Enterprises encounter many problems in the process of developing foreign direct investment.They do not have sufficient capacity to deal with risks in foreign direct investment activities.The choice of foreign direct investment entry mode is the most important for enterprises eager to explore the international market.This is a challenging issue that directly affects the follow-up activities of Chinese enterprises.In this context,this paper studies how heterogeneous enterprises choose the mode of foreign investment.This paper studies the private enterprise's foreign direct investment into the mode selection behavior from the perspective of non-productivity heterogeneity.Before conducting the empirical analysis,it fully reviewed the OFDI entry mode selection theory and analyzed the characteristics and existing problems of private enterprises' foreign direct investment.Then,based on the heterogeneity of the company,a series of hypotheses were proposed.The logit model was selected,and the 78 cross-border M&A and 51 greenfield investment sample data completed by Chinese private enterprises in 2012-2017 were used to conduct empirical tests.Finally,the conclusions of this paper are drawn based on the empirical results.The main conclusion of this paper is that the larger the scale of Chinese private enterprises,the higher the level of strategic assets and the richer the experience of internationalization,the greater the probability that they will choose cross-border mergers and acquisitions to enter the international market.On the contrary,they will prefer greenfield investment..In the end,based on the results obtained in the previous article,the paper puts forward some suggestions from the enterprise itself and the government.The enterprise should fully understand the resource capacity of the enterprise when making foreign direct investment decisions,and be familiar with the laws and regulations and culture of the host country.Secondly,the government should actively promote the growth of private enterprises,help private enterprises to solve the problem of information asymmetry,and accelerate the pace of "going out" of Chinese private enterprises.