Research On OFDI Mode Under The “Belt And Road” Initiative Of Chinese Manufacturing Enterprises

It is experiencing rapid growth of Outward Foreign Direct Investment(OFDI)from China,the world’s largest developing country and the major emerging economy with the most economic dynamism and growth potential.Under the complex and turbulent external environment and enormous international challenges,the comprehensive national strength of China has shown strong vitality and stable development in the field of investment and trade.It is a remarkable fact that OFDI from China to the "Belt and Road" countries has become a robust economic growth point,interpreting the unique institutional advantages of China.However,the manufacturing industry of China is facing the realistic background of "large in scale but not strong" and "rapid development of OFDI but unsatisfactory investment cooperation",and the failure of investment projects due to improper decisions in the process of "going out" is not a few cases.Therefore,it is of certain practical significance to deeply study the influencing factors and internal mechanism of OFDI in Chinese manufacturing enterprises.The traditional international investment theory has been widely concerned and emphasized by scholars at home and abroad,and the research results of its application to the OFDI behavior of multinational enterprises in developed economies are not uncommon.However,there are some inconsistent findings of traditional international investment theory in explaining China’s problems.It is difficult to explain the new phenomenon of OFDI behavior of multinational enterprises at the present stage in China.Therefore,it is of great theoretical significance for this thesis to explore the choice of Chinese global enterprises’ OFDI model based on theories such as country-specific advantages.The potential innovations and contributions of this thesis can be summarized as follows.Firstly,this study advances the conventional institutional theoretical framework for analyzing the OFDI mode of enterprises by constructing a more comprehensive analytical framework,which is based on the new perspective of institutional environment,specifically including "business environment-institutional differences-cultural differences",to further reveal the micro-mechanism of how the institutional environment impacts OFDI modes.Secondly,we introduce innovative and special variables that are relevant to the era context and new features of China’s "Belt and Road" initiative to quantify the expanded "Belt and Road" network and integrate them into empirical research.This allows us to explore the positive role played by signing "Belt and Road" cooperation agreements in the decision-making process of Chinese manufacturing enterprises’ OFDI modes.Thirdly,we identify situational factors that affect the OFDI modes selection of Chinese manufacturing enterprises.We conduct a beneficial situational analysis from the perspectives of heterogeneous investment motivations and the "Belt and Road" initiative.The interaction effects between these variables provide a more detailed micro-level basis for explaining the "heterogeneous preferences" of Chinese manufacturing enterprises’ OFDI mode selection.Additionally,this thesis uses indicators such as "political affinity" as instrumental variables to identify the influence of institutional environment.Overall,this thesis enriches the existing institutional theory,expands the field of international business,and contributes to promoting geopolitical patterns and international cooperation of the "Belt and Road" initiative in a rigorous and scientific manner.This article sorts out theoretical frameworks such as RII theory and national-specific advantages theory.This study collects relevant data,including 1,692 OFDI events completed by 735 manufacturing enterprises listed in Shanghai and Shenzhen A-share market from 2010 to 2019 to conduct econometric testing and regression analysis from three dimensions,using multiple empirical methods such as Logit,Probit,instrumental variable method,moderation effect model,and endogeneity test.Based on the general rule of how institutional environment affects the OFDI mode selection of Chinese manufacturing enterprises,this thesis proposes policy recommendations for the OFDI mode selection of Chinese manufacturing enterprises in the construction of the Belt and Road Initiative.Through research,this thesis has the following findings.First,the host country’s business environment could positively affect the OFDI model choose of Chinese manufacturing enterprises.From the perspective of the enterprise life cycle,there is a positive effect of the business environment on Chinese manufacturing enterprises’ choice of cross-border M&A in the stages of opening a business,getting a location,accessing finance,dealing with day-to-day operations,and operating in a secure business environment.The improvement of the business environment promotes M&As of Chinese manufacturing enterprises in developing countries,and the effect on developed countries is not apparent.The resource-seeking motive has a positive moderating effect on the choice of M&A by Chinese manufacturing enterprises in OFDI mode,while the market-seeking and technology-seeking motives have a negative moderating effect.The Belt and Road Initiative has a positive moderating effect on the relationship between the host country’s business environment and the M&A of Chinese manufacturing enterprises.Second,the greater the institutional differences between the host country and China,the more Chinese manufacturing enterprises tend to choose cross-border M&A;the smaller the institutional differences,the more they tend to select greenfield investment.Institutional differences are positively correlated with M&A of Chinese manufacturing enterprises based on resource seeking while technology seeking motivations are negative.The signing of the Belt and Road Initiative cooperation document has a positive moderating effect on the relationship between institutional differences and the M&A of Chinese manufacturing enterprises.Thirdly,the more significant the cultural difference between the host country and China,the more Chinese manufacturing enterprises tend to choose cross-border M&A.Technology seeking motivation and resource seeking motivation have positive promotion effects on cultural differences and the choice of M&A by Chinese manufacturing enterprises OFDI.The signing of the Belt and Road Initiative cooperation document has a negative moderating effect on the relationship between cultural differences and the M&A of Chinese manufacturing enterprises.