Differential Analysis Of The Impact Of Economic Policy Uncertainty Between Home Country And Host Country On OFDI In China

With the accelerating pace of "going global" of Chinese enterprises,the "quantity" and "quality" of foreign direct investment have been greatly improved.On the one hand,in 2020,the scale of China’s OFDI traffic jumped to the first in the world for the first time,reaching 153.71 billion yuan.The scale of OFDI stock ranked third in the world,second only to the United States and the Netherlands.On the other hand,by the end of 2020,nearly 80% of China’s OFDI stock has gone to the service industry,and the investment structure has been continuously optimized.However,in the context of the increasingly close relationship between China and the world economy,Chinese enterprises are facing many external risks and challenges in foreign direct investment.Governments of various countries frequently adopt economic means to regulate the economy.In addition,as the reform enters the deep-water and critical period,the internal uncertainty is also increasing,which makes enterprises have to consider the impact of these uncertainties on their OFDI decisions.Based on this,this paper aims to explore the impact of economic policy uncertainty of home country and host country on enterprise OFDI,and analyze the heterogeneity based on the investment motivation of enterprises.On this basis,this paper selects the micro data at the level of Chinese listed enterprises from 2000 to 2015 and the macro data at the country level from 2003 to 2020,makes an empirical analysis on the relationship between the economic policy uncertainty(EPU)of the host country and the home country and China OFDI,and finally comes to a stable conclusion.(1)the increase of economic policy uncertainty in the home country will promote Chinese enterprises to carry out foreign direct investment;When the economic policy uncertainty of the host country increases,it will inhibit enterprises’ foreign direct investment.(2)Enterprises’ foreign direct investment is affected not only by their own financial situation,but also by the macro factors of the host country.When making location choice,enterprises will choose countries and regions whose investment motivation is consistent with the resource endowment of the host country.(3)For OFDI enterprises with different investment motives,the impact brought by economic policy uncertainty is different,but the improvement of economic policy uncertainty in the home country is conducive to Chinese enterprises’ foreign direct investment.It is established for any investment motivated enterprise,but the degree of impact is different.(3)The stronger the financing constraints faced by enterprises,the more unfavorable it is for enterprises to carry out foreign direct investment activities,and on the premise of increasing economic uncertainty,the financing constraints have a greater inhibitory effect on OFDI of non-state-owned enterprises.Finally,according to the above conclusions,this paper puts forward effective guidance suggestions for Chinese enterprises to carry out OFDI from the perspective of government and enterprises.