Analysis Of The Influence Of Firm Heterogeneity On The Foreign Direct Investment Strategy Of Chinese Manufacturing Enterprises

Since China launched the "going out" strategy in 2003,China's foreign direct investment has gradually entered a period of rapid growth.In 2013,China's "the Belt and Road" initiative further promoted the development of China's foreign direct investment.In 2014,China's direct investment outflow exceeded inflows and became the net exporter of capital for the first time.Although China experienced the first decline in foreign direct investment flows in 2017,it still ranks third among all countries and regions.China has become a big country with a veritable foreign direct investment.Currently,many scholars have comprehensively analyzed he influencing factors of China's foreign direct investment at the national level and the industrial level.From the perspective of enterprises,the research on the factors affecting foreign direct investment mostly use the industrial enterprise database,but the database of listed companies is rarely involved.Therefore,based on the theory of enterprise heterogeneity,this paper adopts the micro-data of listed companies in the manufacturing industry to study how the heterogeneity factor of enterprises affects the foreign direct investment strategy of Chinese enterprises.On the basis of collating and reviewing the literature research of scholars at home and abroad,this paper firstly introduces the concept,theory of enterprise heterogeneity and related theory of foreign investment,and the mechanism analysis of foreign heterogeneity affecting foreign direct investment.The theoretical basis,in which the core enterprise heterogeneity theory holds that only companies with higher productivity will conduct international operations,and the most productive enterprises will choose foreign direct investment.Secondly,this paper outlines the basic situation of Chinese enterprises' foreign direct investment from the national level,and summarizes the characteristics of China's manufacturing foreign direct investment.Finally,the corresponding empirical analysis is carried out.This paper combines the data of China's manufacturing listed companies with the two databases of China's foreign investment enterprises to select a total of 9 years' of data from 2005 to 2013,using Probit binary selection model to analyze the relations about heterogeneity of manufacturing enterprises and foreign direct investment behavior in China.We select the total factor productivity calculated by the LP method as the core explanatory variable,at the same time,we take the enterprise scale,capital intensity,human capital,enterprise establishment period,whether it has state-owned capital,or whether it has foreign capital as control variables to analyze the problem of foreign direct investment's decision-making in China's manufacturing enterprises.Then we will lag the first factor of total factor productivity to solve the endogeneity problem of the model,and also use total factor productivity calculated by the Solow residual method and approximate total factor productivity as a tool variable for empirical analysis to test the robustness of the empirical results.The study found that,in general,enterprise productivity,enterprise scale,human capital,business operation years and whether it is a foreign-funded enterprise all contribute to the promotion of foreign direct investment in China,and capital intensity,whether it is a state-owned enterprise are significantly negative,indicating that the above variables have a significant inhibition for foreign direct investment in enterprises.Subsequently,an empirical analysis was carried out from the perspective of the manufacturing industry.The results show that in other sub-sectors other than the textile and apparel industry,total factor productivity,enterprise size,human capital and establishment period are significantly positive,while enterprise capital density impact varies across industries,low capital density industries such as the food and beverage,textile are significantly negative,and industries with high capital density such as machinery,metals,and petrochemicals are significantly positive.At the same time,as above,we use the total factor productivity of the lag phase to solve the endogeneity problem of the model,and also use the total factor productivity calculated by Solow residual method and approximate total factor productivity as instrumental variables for empirical analysis to test the evidence.The robustness of the results also yielded similar conclusions,but in the robustness test calculated by approximate total factor productivity,it was found that the productivity coefficient of the textile and garment industry was re-marked at the level of 10%,but after considering the calculation approximate total factor productivity,we still think that the regression results in this part are robust.On the basis of summarizing the research conclusions,this paper puts forward corresponding policy recommendations from the enterprise level and the government level.At the enterprise level:firstly,improve enterprise productivity and expand enterprise scale;secondly,attach importance to personnel training and improve technical level;thirdly,figure out enterprise advantages and host country characteristics;fourthly,strengthen communication with stakeholders.At the country level:firstly,improve the legal system for foreign investment;secondly,formulate a comprehensive support policy system;thirdly,strengthen project guidance in different industries;fourthly,strengthen policy communication among countries.