Heterogeneous Resources Of Firms And Greenfield Investment

As an important form of outward direct investment,Greenland investment has grown rapidly in recent years: from 2014 to 2015,the average annual value of Greenland investment in China exceeded us $50 billion and continued to increase.With the continuous promotion and implementation of the "One Belt And One Road" policy,the number of greenland investment enterprises will continue to grow.Especially in the context of economic globalization,the overseas expansion of enterprises is an irreversible trend,and the flow of outward direct investment in China continues to grow at a relatively fast rate.How the local resources of enterprises affect the green space investment has become a difficult problem for us to solve.It is very important to study this problem both in theory and in practice.This paper studies how heterogeneous enterprise resources influence the green space investment decision from the perspective of institutional factors,and explores the relationship between green space investment and heterogeneous enterprise resources through theoretical and empirical analysis.The basic framework of this paper is as follows.After reviewing the influence of enterprise heterogeneity theory,foreign direct investment theory and resource theory on green space investment decision making,the organizational knowledge theory and international production balance theory are studied to determine the characteristics of enterprises with heterogeneous resources related to green space investment decision.An empirical study is then conducted using manufacturing enterprise research samples from 2008 to 2021.The empirical analysis will consider the "joint effect" of multiple factors that simultaneously affect the green space investment decision of multinational companies.In this way,it expands the research gap in the green space investment decision model,and reveals the interaction between factors at the national level and enterprise levels.The conclusion of this paper is as follows: First,while all other factors remain unchanged,the higher the technology intensity of a company,the greater the probability of choosing green space investment to enter a country’s market.Second,the more international experience a company has,the more likely it is to enter a country’s market.Third,the smaller the probability of enterprises with international experience to choose the green space investment mode in countries with good quality system.Fourth,when other conditions are the same,the higher the technology intensity of a company,the greater the probability of a country with a good quality system to choose the green space investment mode.After considering the nature of regional and enterprise ownership,when the technology intensity of non-state-owned enterprises and state-owned enterprises is improved,the probability of choosing green space investment as a means to enter the international market will increase.In addition,there are differences in eastern,central and western China.Empirical research shows that the western region and the other two regions have a greater tendency to choose green space investment when the technology intensity of enterprises increases,but the enterprises in the western regions with international experience are unlikely to choose green space investment to enter a national market.In addition,after adding the system quality adjustment,the impact of enterprises in western China on green space investment is not significant,and it can be seen from the coefficient that the impact is very small.Compared with previous literature,this paper has the following two innovation:first,the domestic and foreign focus on enterprise resources and ability and institutional factors on the influence of green investment research,has not yet considered transnational situation into mode decision may be affected by multiple factors concurrent "joint effect",failed to reveal the interaction between the national level and enterprise level factors.This study combines the resource theory and the institutional theory and the theory of OFDI selection to discuss how to explore the specific advantages of enterprises under the different institutional environment of the host countries,so as to better explain whether there is an interaction between the specific advantages of enterprises and the institutional environment.This not only makes up for the deficiency of a single or a few theoretical perspectives in the past literature of the foreign direct investment selection model,but also provides a new and reasonable explanation for some contradictory conclusions about the relationship between the single dimension factor and the new investment model in the previous literature.Second,the empirical research method of this paper is tested by ordered probit model,which is helpful to understand the effect of heterogeneous resources,helpful to enterprises to choose foreign investment methods and the government to formulate relevant green space investment policies and measures,and also has certain practical significance to China’s "going out" policy.Finally,policy recommendations are provided at the enterprise and government levels.According to the greenfield investment path identified in this study,the international investment experience of firms has a significant impact on greenfield investment decisions,and the negative impact of internal uncertainty(technology intensity of firms)and external uncertainty(institutional quality of host countries)on greenfield investment decisions is found to be important for greenfield investment because they can overcome the negative impact.For firms in emerging markets with no international investment experience,there is an opportunity to gain investment experience in the host country through incremental learning during the process of entering international markets.Since the behavior of MNCs in FDI is still mainly market exploration,companies need to choose the form of establishment according to local market realities,design production and organizational forms according to local conditions,and successfully deal with risks and challenges.At the same time,the government must continue to provide a favorable international institutional and business environment for the "internationalization" of Chinese MNCs.In an unfavorable environment of intensifying global competition and rising trade protectionism,the government must take the lead in building mutually beneficial cooperation,mutually beneficial international diplomatic relations and a credible image of a great power,so that Chinese companies can enjoy a quality business environment and an institutional framework for foreign direct investment at home.Considering that Chinese enterprises,especially state-owned enterprises,have often faced discrimination and hostility from local governments,other enterprises and public opinion in host countries when investing overseas in recent years,the Chinese government should actively engage in political diplomacy,economic cooperation and cultural exchanges,provide practical policy support to multinational enterprises in the process of outward FDI in host countries,and promote unprecedented development of enterprises by allowing them to invest overseas.It should lay the foundation for a business environment that enables companies to invest abroad and promote unprecedented growth.The government can also take relevant policy measures to promote the development of industry associations that support inter-firm communication and resource sharing,and guide Chinese firms to expand overseas so that Chinese multinational enterprises can effectively and quickly hedge the risks they face in expanding overseas and gain institutional legitimacy in their host countries.