Influence Of Techological Capability On OFDI To East And South East Asia:Moderating Role Of Infrastructure And Institutions

This article uses extensive fieldwork data to focus on answering is:How Chinese and Japanese companies are investing to East and South East Asia. In term of technological capability of home countries, infrastructure and institution of host countries play a significant factor in foreign direct investments. We use second hand data to estimated a foreign direct investment (FDI) function that pools sectional data for nine major East and South East Asia nations（regions）:Hong Kong of China, Korea, Indonesia, Malaysia, Philippines, Singapore, Taiwan of China, Thailand and Vietnam on Chinese and Japanese OFDI from 2003-2012. Home countries database from MOFCOM and JETRO, data led to a sample which consists of 180 FDI flow, including 90 data from Chinese OFDI and 90 from Japanese OFDI. We used STATA 12 to analyze the pool cross-section data. We take the mean-centering approach in our regressions to deal with potential multicollinearity and check variance inflation factors (VIF) for our variables.In sum, we found that Chinese technology capability (home patent); host infrastructure and institution shapes large extent to home country OFDI. Results suggest that the interaction term between the Chinese technological capability, host infrastructure and institution to home country OFDI shows that the positive impacts when the host countries are high quality of infrastructure, high level of economic freedom and Chinese MNE has high technology base. Japanese technology capability and host economic freedom shapes small extent to home country OFDI. The interaction term between the Japanese technological capability and host infrastructure to home country OFDI shows that the negative impacts. It’s mean that Japan know as developed country, is attracted to invest in poor quality of infrastructure, poor economic freedom. This suggests that the characteristic of Japanese OFDI is attracted to countries with poor infrastructure and it take little advantage on Japanese technological capability. This is because Japanese MNEs choose location strategies in a way that minimizes the risk of technology leakage to potential competitors. (Kugler, 2000)At last, Because I am a foreign student, I wrote this paper in English first, and then translate it into Chinese by the help of my tutor and collegues. So you will see both Chinese and English vesion of my dissertation.