Research On The Effect Of Industry Experience On The Pace Of Foreign Investment

With the implementation of reform and opening up, Chinese economy with the flourishing development has made remarkable achievements. China already becomes the main country that absorbing FDI inflows and output of FDI outflows. Chinese firms also have to actively go abroad, gradually enter the international market, and start the internationalization process. So, which should be the Chinese firms’paces of foreign investment choose, small or large? It is a key decision of Chinese internationalization. Therefore, this paper attempts to research the effects in an eye of industry experience on the pace of Chinese firms’multinational investment. To do this, we can understand the relationship between foreign experience and the pace of foreign investment. According to that effect, it can recommends that the Chinese firms recognize the role played by experience more fully, grasp the pace of foreign investment better, and promote their rational judgment effectively.Firstly, the paper summarizes the developing situation and the industry structure of China’s foreign direct investment, and then it conceives the research framework on the basis of the purpose and meaning. Secondly, this paper reviews the learning theory, experience learning theory, the pace of foreign investment theory and so on. It provides the theory basis for the study on the influence of industry experience. The third part, we analyzed three types of industry experience from different perspectives, which include firms’own experience (same subsidiary industry), other firms’ experience (same parent industry) and other firms’experience (same subsidiary industry), affect the pace of foreign investment. On this basis, we also analyzed the moderation influence of other firms experience (same parent industry), other firms experience (same subsidiary industry), Firms’Control and Firms’Scale. Next, through the empirical analysis bases on the dataset of listed firms in Shanghai stock market during 2000-2010, we test our theory model and its corresponding hypothesis. Finally, according to the conclusion, the paper put forward the corresponding enlightenment, but also points out the limitations of the study and its future prospects.The results show that:firms’own experience (same subsidiary industry) could improve the pace of foreign investment, while other firms experience (same parent industry), other firms experience (same subsidiary industry) can hinder the pace of investment. At the same time, other firms experience (same parent industry), other firms experience (same subsidiary industry) and firms’Scale have a negative effect to the relationship of the firms’own experience (same subsidiary industry) and the pace of foreign investment. On the contrary, control variable contribute to the relationship. Further, the effect of industry experience firms is different between the manufacture and the service. The conclusion has the important revelatory function to improve learning and using on the experience of different industries, grasp the regularities of the investment pace, reduce unnecessary failed initiatives, explore the suitable rules of Chinese firms investment, and adjust the pace of foreign investment rationally.