Research On The Location Choice Of China's Direct Investment In Europe

In recent years,with the implementation of the "going global" strategy of the Chinese government,more and more Chinese enterprises have begun to invest overseas.Since joining the WTO,China has become more integrated into the tide of globalisation,especially if we consider the last ten years.Within that decade,China and Europe have made considerable progess in economic cooperation and stable development.According to Chinese statistics,the trade between China and Europe has incresed from $200 billion in 2004 to $547 billion in 2016,an increse of nearly three times.Europe has been China's largest trading partner for twelve consecutive years,however the fact that European countries are at varying degrees,levels of economic development has posed problems for Chinese enterprises,primarily in where to invest,also know as location choice.This paper is aimed at studying the main location factors for Chinese enterprises investing in Europe,using theoretical modeling,empirical research and data analysis.To be more specific,this paper studies the important factors that make Chinese companies invest in some European countries and not others.Firstly,the paper shows the current situation of China's OFDI in Europe.The main location factors affecting the geographical location of Chinese companies from the former description with methods of data comparison and analysis are researched.Porter's diamond model is then used to help build the theoretical model of this paper.Finally,to verify the location factors previously obtained,the paper adapts the empirical analysis to test if they are significant or not.This paper focuses not only on economic data,but also on non-economic factors such as governament policy,"sister city relationship" between different state's governmentThese factors are very important for foreign direct investment,especially in "reverse investment",where the investment flows from less developed countries to more developed countries.