The Influence Of Financing Structure On Overseas Direct Investment Of Enterprises

In recent years,China’s foreign direct investment has developed rapidly and strongly.In 2020,China’s OFDI flow ranked first in the world for the first time.With the continuous improvement of China’s foreign investment framework,more and more enterprises participate in the world trade exchanges through foreign investment.Enterprises need sufficient funds for overseas investment,which can come from original internal accumulation or external financing.However,the internal accumulated funds are only applicable to the initial stage of investment,and the later stage of investment needs to be supplemented by external sources.Different financing sources produce different financing structures,so financing structures may have a certain impact on enterprises’ foreign investment activities.This paper sorts out relevant literature and theories and analyzes the relationship and mechanism of financing structure’s influence on enterprises’ overseas direct investment.Panel data of 1725 companies listed in China’s A-share market from 2010 to 2020 are used,and the data come from CSMAR and WIND.Using debt ratio measures enterprise financing structure and enterprise level control variable model,using the benchmark return Probit model,and using the Logit and robustness test panel negative binomial model,at the same time,through the research and development of enterprise innovation and productivity point of view,the influence mechanism analysis and the analysis of the heterogeneity and endogenous test,come to the conclusion as follows:(1)The financing structure will affect the overseas direct investment of enterprises.The high proportion of equity financing in the financing structure of enterprises is conducive to the emergence of overseas investment projects and the increase of their scale;(2)The financing structure will affect the overseas direct investment of enterprises through the innovation research and development and productivity of enterprises.That is to say,the high proportion of equity financing in the financing structure of enterprises will promote the increase of enterprises’ innovation research and development and improve the productivity of enterprises,which is beneficial for enterprises to make more overseas direct investment;(3)The conclusion still holds when enterprises differ in nature,region and dependence on external financing.According to the results of industry heterogeneity,the financing structure of manufacturing enterprises does not have a significant impact on their overseas direct investment.Finally,based on the empirical results,relevant suggestions are put forward from the perspective of corporate financing structure and government.