Empirical Analysis Of Impact Of Institutional Factors On Chinese Enterprises’ Foreign Direct Investment

With the arrival of the era of economic globalization, the inflow and outflow of foreign direct investment has become an important way for countries to integrate into the globalizing economy. In recent years, the rapid development of emerging economies in foreign direct investment, to some extent, has changed the situation where economic globalization was dominated by TNCs in developed country. Differs from enterprises in developed countries, which run their foreign direct investment on the ownership advantages, internalization and location advantages, Chinese enterprises do not fully have the above advantages. However, Chinese enterprises’OFDI are developing rapidly in recent years. The institution of Chinese system has been thought to act as a role in pushing Chinese enterprise to invest abroad, besides on firm resources and industry competition. Enterprises as the main body of foreign direct investment will be affected by macroeconomic policies and regulations established by the mother country when planning and implementing the foreign direct investment. This article will analyze Chinese enterprises’driven factors of OFDI based on the Institutional-based views. Five variables were picked through the analysis and summary of the literature review. They are government policy support, financial and credit support trade relations with the host country、cultural differences、distance from mother country to host country. These five macro system variables will be used to explain the Chinese Foreign Direct Investment with the application of OSL linear regression model, and empirical test was performed at the last to give suggestions for companies and government in the field of OFDI.