Research On China's Centralized Location Choice Of Outward Direct Investment

Location selection is an important problem of the international direct investment. In the process of "going out", China's enterprises tend to select the location very closely. Until now start from the initial stage, although the scope of countries and regions receiving China's foreign investment is continuously widening, in the view of structure and layout, the characteristics of decentralization is still a growing trend.This paper firstly analyzed the regional distribution and the concentration characteristic of China's outward direct investment. Using the indicator of geographical concentration in industrial economics, the concentration of China's foreign investment's location between 2003 and 2007 is measured. The results show that the location of China's foreign investment is highly concentrated, especially from the view of countries and regions; from the continents'concentration of view, the highest is Asia, Latin America, the second, and the lowest is Africa.Then this paper analyzed the factors which impact the regional distribution of China's foreign investment from three aspects: host country factors, foreign investment incentives and value chain. From the factors in host country, the empirical analysis results show that the host country's market size, wage levels, energy reserves, China's exports to the country, and China's investment gathering level, are the important factors to the decision of location for China's outward investment. From the type of investment, Market-seeking foreign investment tended to be concentrated in a relatively large market in developed countries and newly industrialized countries and regions; resource-seeking foreign investment mainly concentrated in the resource reserves developing countries and countries with relatively weak financial and technical strength; technology seeking foreign investment mainly concentrated in the developed countries with higher scientific research ability such as Europe, America and Japan; from the perspective of the value chain, enterprise value chain makes the enterprises choose different areas; different industrial value chain has different impact to the concentration of locating, and modularization in value chain is an important factor to promote the concentration.On the basis of the above analysis, this paper gives certain advice for improving the current location choice of China's outward direct investment. To carry out foreign investment, we have to consider the concentration of FDI in locating, combined with the type of investment, and the industry which is invested. The decision should give full play to the advantages of centralized location, avoiding its disadvantages, and promote the overall development of China's foreign investment.