Political Risk Of Host Country,Risk Management Of Multinational Enterprise And Its Outward Foreign Direct Investment Performance

The rapid development of economic globalization has prompted enterprises to enter the international market continuously.China has become the fastest growing and most significant source of foreign direct investment.With the strong support of government policies,the scale of foreign direct investment of Chinese multinational enterprises has developed rapidly.In the process of risk decision-making of outward foreign direct investment,Chinese multinational corporations tend to invest in politically risky host countries.However,multinational corporations face many challenges in the operation of politically risky host countries.At this time,whether they have risk management conditions and risk management capabilities to effectively manage political risks and whether multinational corporations can operate well in host countries with high risks have become the key to achieve the performance of outward foreign direct investment.Therefore,this paper analyzes the relationship between political risk of host country and performance of outward foreign direct investment of multinational corporations from the perspective of prospect theory,and introduces risk management resources and risk management capabilities as adjustment variables to study the relationship between political risk of host country and performance of outward foreign direct investment of multinational corporations.On the basis of theoretical analysis,an empirical test was conducted on 845 overseas subsidiaries of China Shanghai and Shenzhen A-share listed companies in 2004-2014 through the use of stata15.0.The empirical results show that:(1)There is a significant positive correlation between political risk of host country and performance of outward foreign direct investment of multinational corporations;(2)The risk management resources of multinational corporations have a positive adjustment effect on the relationship between political risk of host country and the performance of outward foreign direct investment of multinational corporations;(3)The role of risk management capabilities of multinational corporations in regulating the relationship between outward foreign direct investment performance of multinational corporations is not significant.This research theoretically enriches the research perspective of the relationship between political risk of host country and performance of outward foreign direct investment of multinational corporations,and incorporating risk management resources and risk management capabilities as adjustment variables makes the theoretical model of the relationship more detailed and explanatory.In addition,it also provides a reference for risk decision-making in the case of the outward foreign direct investment of Multinational corporations in emerging market countries represented by Chinese multinational corporations and effective risk management to enhance the performance of outward foreign direct investment.