Location Selection Analysis Of China's Outward Foreign Direct Investemtn

Since the reform and opening policy in 1970s, China's foreign direct investment has achieved significant growth. At the end of 2009,12000 China domestic investors have set up 13000 foreign direct invested enterprises, which are distributed in over 17 countries, the investment coverage rate is 72.8%.The net value of the foreign direct investment is 245.75 billion U.S.dollars, the total assets of China's foreign enterprises is over 1 trillion U.S.dollars.China has been one of the largest capital exporter among developing countries. Our government and the enterprises have attached great importance to overseas investment. However, the foreign direct investment of the Chinese enterprises stated relatively late, there still exist a gap with the developed countries, what kind of market location that should be chosen in order to be more conducive to the development of the overseas business of China's investors is a question that to be further discussed. And this is the focus of this study. That is location selection of the China's foreign direct investment.Firstly, Reviewe the literature of the location selection of foreign direct investment and the gravity model. Next, we describe the four stages of China's foreign direct investment development. Give an overview of the five characteristics of China's OFDI location distribution. And give the analysis of the problems that exist in the China's OFDI location selection process. Then, we separately analyze the investor, investment country, host country in the theoretical aspect. And sum up the main factors that should be heavily considered for China's foreign direct investment location selection.Finally, on the basis of theoretical analysis, use the data of China's OFDI in 73 countries and regions from 2004 to 2009 to make a Stata analysis. Apply the random effects panel data model to analyze the improved gravity model. The result shows that the host country per capital GDP, host country economic growth rate, the per capital GDP difference between the invest country and the host county, the bilateral trade volume, the geographical distance, and the economic freedom rate of the host country play have great influence on the China's OFDI location selection. In addition, through the further analysis of economic freedom rate, we found that the trade freedom, the fiscal freedom rate, the government spending freedom, the monetary freedom, and the property rights freedom have very significant impact on the China's OFDI location selection.In the end, we make a summary on the basis of theoretical and empirical analysis. And make some specific policy proposals.