Research On Overseas Investment Performance And Mode Upgrade Of Chinese Construction Machinery Enterprises

The construction machinery industry plays a supporting and protecting role in the national economy and social development, which has become one of the pillar industries in China and plays an important role in "One Belt and One Road" and "going out" strategy. Chinese engineering machinery enterprises has been located in more than 100 countries around the world, and important examples as Zoomlion acquiring CIFA of Italy, Sany acquiring Putzmeister, Liugong Group acquiring Poland HSW, XCMG acquiring Germany SCHWING. So, what is the golden rules of overseas investment to follow? How does the overseas investment affect the performance of the companies and industry? What are the influencing factors and mechanism of overseas investment?The existing research shows no results for the questions above. First, research on the mode of overseas investment only do static comparison between overseas building and overseas merger and do nothing on its dynamic influence on subsequent overseas investment; secondly, the research on the following aspects is not enough:the interaction effect of the overseas building and overseas acquisition, the influence factors of performance and overseas investment models and the interaction effect of the company performance and industry performance; finally, the performance research mostly focuses on the overseas investment performance, and less on engineering machinery overseas investment industry reverse spillover effect.In view of the above problems, this paper establishes the mode of overseas investment, enterprise performance and the performance of the industry as a whole analysis framework based on the basic theory of value chain and industry chain, network learning theory and reverse spillover effect theory, which constructs the value chain promotion caused by dynamic mode upgrade, network learning model caused by enterprise performance and dynamic change, industry total factor productivity arising from the performance of the industry spillover of the feedback mechanism.Based on the above analysis, this paper put forward three propositions:first, the basic law of overseas investment of China’s engineering machinery enterprises, two models are not mutually independent, and building model of the overseas can promote overseas mergers and acquisitions. Second, for the short cycle, due to the agency and information asymmetry caused by high transaction costs and huge sunk cost, new buliding model and merger and acquisition mode on enterprise performance have negtice impact on overseas acquisitions performance. For the long cycle, due to the enterprise culture, the core technology, management methods and other aspects of the constant begin to adapt, leading to the gradual improvement of enterprise performance. Third, the overseas building model and overseas acquisition mode on the whole, has a reverse spillover effect on the construction machinery industry, which can promote the industry’s total factor productivity.According to the theoretical analysis of the three propositions, this paper has done the following three aspects of the empirical studies:First, the empirical research on the upgrading of the overseas investment model of construction machinery enterprises in china. Using factor analysis method to evaluate the comprehensive environment of different countries. Taking the score to Logit/Probit regression model to test conversion relationship between different modes of overseas investment of China’s engineering machinery enterprises, the study finds building model of the overseas promote overseas mergers and acquisitions mode. From this view, we can draw a conclusion:building mode of overseas and overseas mergers and acquisitions are not independent on each other, the overseas new model has a significant effect on the subsequent overseas acquisition model.Second, the empirical research on the performance of overseas investment enterprises of construction machinery enterprises in china. Using construction machinery enterprises in China’s overseas investment data from 2004 to 2014, this paper tests performance of different patterns of overseas investment enterprise with three stages to predict the future trend of the performance of overseas investment of enterprise model. The results finds that the more overseas new branches, the more negative effect on corporate performance; the larger overseas transaction amount, the more negative effect on corporate performance. Interaction model empirical finds that overseas mergers and acquisitions mode have more negative effect than overseas building mode of enterprise performance. The three stage prediction empirical model prove that the performance decline is one of the enterprise overseas investment and development process. As the deepening of the internationalization, the enterprise performance will gradually improve. Thus, this paper obtains the second conclusion: from the short cycle, building model of the overseas and overseas mergers and acquisitions mode influence on firm performance are negative; from the interaction point of view, overseas building mode has more negative effect. From a long period of view, enterprise performance will show the level "S" type of development characteristics, the overall trend of performance for enterprise performance will rise.Third, Chinese Construction machinery enterprises overseas investment industry reverse spillover effect performance empirical study. Using the data of engineering machinery industry in China and based on DEA Malmquist productivity index method, this paper measures the total factor productivity of industry of machinery to test reverse spillover effect. The results shows that the overseas investment of China’s construction machinery plays a promoting role in the total factor productivity of the industry. We can draw the third conclusion of this paper:the reverse spillover effect of foreign investment on construction machinery industry promote the improvement of total factor productivity of the industry.The contribution of this paper is mainly reflected in the following three aspects:First, we combine the mode of overseas investment, enterprise performance and industry performance into the unified analysis framework and construct overseas investment model upgrade module, the performance mechanism of overseas investment enterprises and industry performance mechanism module, which makes up the problems of previous research of separation and comprehensive consideration of overseas investment performance. We analyze the dynamic feedback mechanism between the value chain and overseas investment mode, network learning mode and enterprise performance, reverse spillover effect and industry performance. We construct the index system of comprehensive evaluation of host country score and put it into the mode of overseas investment and upgrade model, overseas investment enterprise performance model and overseas investment industry performance model, which makes the research more comprehensive and multi-dimensional empirical.Second, we reveal the dynamic process of China’s engineering machinery enterprises overseas investment mode choice and firm industrial chain and value chain upgrading and avoid the problems of previous researches which focused on the analysis of the affecting factors of the overseas investment model and characteristics of overseas investment model analysis, behavior analysis of overseas investment mode of the game, which failed to fully consider the overseas investment mode selection between different modes of overseas investment. Different modes of overseas investment will affect macroeconomic factors, middle factors and micro factors to foreign invested enterprises industrial chain positioning, which causes the periodic change of corporate performance and shows level S development rules of overseas investment enterprises.Third, we explain the paradox that Chinese engineering machinery enterprises overseas investment with different ownership enterprises overseas investment led enterprise performance decline when scale increasing and investment mode of enterprise behavior upgrading. We analyze the before correlation effects, the association effect, competition effect of "Trinity" reverse spillover mechanism and we provide evidence for government industrial policy and enterprise overseas investment strategy...