Research Over The Way And Location Choice On Enterprise’s Entry Into International Market

New-New Trade Theory provides new interpretation for the path choice of enterprise internationalization, and answers why only part of enterprises choose export (Melitz,2003) or FDI (Helpman, Melitz and Yeaple,2004) to enter the international market. However, the research of the existing theory still exists some areas to supplement. For example, it is difficult to give appropriate explanation for that enterprises simultaneously choose the way of export and FDI to enter the international market, and the behavior that American branches in Austria, Belgium, Czech and other countries sell their products in the locality that serves as a platform to be re-exported to other European Union countries. Based on these, the third chapter extends from the following aspects:Firstly, extends the way to enter the international market from export and FDI separately to the way including export and FDI simultaneously. Secondly, extends the theoretical model of HMY(2004) to the situation of multi-country market ulteriorly,and applies the new model to concrete background of reality.For the past few years, the development of China’s import,IFDI and OFDI has made new achievements. In2012, the scale of the import reached1818.41billion dollars that ranked second in the world. In2011, the flow of the inward FDI and outward FDI in our country was121billion dollars and84billion dollars, which ranked second and third in the world respectively. Among them, looking from the change of the industry that FDI entering into China, the proportion of FDI entering into capital-intensive and technology-intensive industry gradually increased. At the same time, the proportion in primary sectors, labor-intensive and resource-intensive manufacturing sectors lowered year by year, looking from the change of the way FDI entering into China, more and more foreign companies enter into our country in sole way. In this context, this study put forward the following questions:How do foreign enterprises choose the way to enter into the Chinese market? Under the condition that the industry and the way which inward FDI entering into China have changed, do the factors that China absorbs FDI change? What factors influence the geographical distribution of inward FDI in China? Why did Chinese enterprises execute foreign direct investment in the early phase? What factors influence the location choice of Chinese foreign direct investment? The content of this research from the fourth chapter to the seventh chapter probes into the above questions, and make an answer.Among the remainder of this research, the first chapter is introduction, which mainly introduced the research background and the problems proposed, research purpose and research significance, research contents, methods, and technical route of research. The second chapter is the related theories and literature research, which combs the development of foreign trade and investment theories, and summarizes the related literature research of Chinese inward and outward FDI. The eighth chapter is the main conclusions and policy suggestions, which summarizes the research conclusions from Chapter3to Chapter7, and proposes concrete policy suggestions.This research obtains the following main conclusions by theoretical analysis and empirical research:(a)From the heterogeneity of productivity, if certain conditions are satisfied, the enterprises should carry out following actions in sequence according to their productivity:export and FDI at the same time, FDI, export, entering into international market. From the coexistence relationship between the heterogeneity of productivity and risk in international market, when the risk of export is more than FDI and certain conditions are met, the author finds out that the amount of enterprises which choose export will decreases, those who choose export and FDI simultaneously will increase, but the amount of enterprises that choose FDI cannot be determined. And when the risk of export is less than FDI and certain conditions are met, the author finds out that the amount of enterprises which choose export as well as export and FDI at the same time will increases, but those who conduct FDI alone will decrease.(b)This research extends the theoretical model of HMY(2004) to the situation of multi-country market ulteriorly,and applies it to concrete background of reality.The author finds out that enterprise of higher productivity tends to carry out FDI in one (or several) selected host country within area, which can be regarded as a trade platform, meanwhile exports products from this (or these) country to others in the area. Enterprise of medium productivity tends to select export to enter all countries within area. And enterprise of low productivity does not enter international market.(c)Considering the coexistence relationship between the heterogeneity of productivity and the differences in the stability of different mode market, the author finds that, if the stability of export market is worse than FDI market,parts of the enterprises,even the productivity cannot meet the threshold of FDI,will choose the way of FDI entering into the international market.In other words, if the stability of export market is worse than FDI market,more corporations will choose FDI to enter international market, and the number of corporations choosing export will decrease. The author combines econometric test with economic theory to set the model to be estimated, and make the empirical test with macro panel data. The result demonstrates that, if the stability of export mode market is worse than FDI, foreign corporation more likely to choose FDI mode to enter the Chinese market.(d)The author emphasizes the dynamic changes of the factors that influence China to absorb FDI. The author raise speculation, and make the empirical tests with panel data during different periods, it shows that:(1) Compared with the previous development period, in the last period, the function of the agglomeration effect, laws and regulations to attract FDI has been further strengthened, while the restriction effects of the investment cost caused by distance on FDI is no longer significant.(2) The advantage of low labor cost is losing and its impact on FDI is decreasing, and the size of Chinese market contributes to FDI all the time.(e)Previous studies mainly emphasized the importance of spatial conglomeration effects on the locational choice of FDI, but ignoring the fact that the cost of labor is changing while spatial conglomeration reinforces itself. The author holds that the spatial conglomeration effects on the locational choice of FDI differ in cases with different labor cost.the research results show that:there is a threshold effect between spatial conglomeration and FDI, by labour costs as the threshold variable, market capacity and associated with the world market have significant effects on FDI location selection, R&D investment and labor quality have different influence on FDI due to the divergence of the regional development level.(f)Through the comparative analysis of the RCA(Revealed Comparative Advantage) index and per capita GDP of goods and services sector, the article finds that Chinese FDI has dual characteristics:it’s not only based on comparative advantage but also against to it, and empirical studies have confirmed this point. In addition, the author conducted a test over whether there is an inclination of institutional risk avoidance and institutional similarity of China’s OFDI, and we found that the effect of the host country’s institutions on China’s OFDI is insignificant.This study expands the content of new-new trade theory, and proposed a new way for the choice of the path of enterprises’internationalization. The study make test from econometrics on the way those foreign enterprises to enter Chinese market, on the changes of factors attract FDI to China,on the choice of Chinese FDI location, and factors affecting China’s OFDI. The conclusions of the examination provide a basis for government to develop policies to absorb FDI and the implementation of accelerating enterprises’"going out" strategy in the "Twelfth Five-Year" Plan.