Chinese Private Firms’ OFDI

After Chinese Economy Reform, especially the Chinese government in the implementation of "Going out" strategy, as the world’s largest developing economy, China’s economy increasingly integrated into the world market, increasing international trade, foreign direct investment levels have rapidly increased. However, with the deepening of reformation and diversification of the investment environment, more and more Chinese enterprises realized the domestic market and their own technology may not let them grow as a high level of modern enterprises. Since China’s economy entered a "New Normal" after relying on cheap labor, low-cost, this kind of development has been unsustainable, enterprises must strengthen the promotion of transformation and upgrading of the industrial chain, and actively explore the international market, to cultivate new growth points.Research on Chinese Private Enterprises’ FDI mode selection has multiple meanings. First, the choice of the entry mode is one of the important decision-making overseas investment strategy, different modes of domestic companies and foreign companies have different effects, the decision will consider different modes of domestic enterprises and foreign enterprises will bring benefits and how cost; Second, foreign direct investment can not only expand their overseas market, but also access to the production technology and management experience higher levels of related fields; third, previous literature scholars is mainly for foreign direct investment carried out in developed countries for enterprise research, theoretical and empirical research on the basis of analysis performed. Therefore, this article attempts from our point of view, analytical techniques less advanced developing countries in foreign direct investment in how to choose investment patterns. Therefore, we expect the choice of Chinese enterprises through direct investment patterns in developed countries studied, effective countermeasures and suggestions for Chinese enterprises and relevant departments to improve their experience and level of foreign direct investment.By building a two-stage dynamic game model to analyze two kinds of green reverse merger and investment patterns of foreign direct investment, which explores a model to better help Chinese enterprises "going out" and get higher profits. We found that:first, when the technology gap between domestic enterprises and foreign enterprises smaller, domestic companies tend to be greenfield investments; when the technology gap between domestic enterprises and foreign enterprises large, domestic companies tend to reverse mergers. Second, the larger the domestic and foreign markets, the reverse merger dominant trend in greenfield investments will be stronger, more domestic enterprises tend to choose the reverse merger; the smaller the size of the market at home and abroad, greenfield investments dominated in reverse mergers and acquisitions trend the stronger, the more domestic enterprises tend to choose to greenfield investments. On the basis of theoretical research model, the paper selects a series of OFDI of Wanxiang Group in the United States and greenfield investment of Nanshan Aluminum in the United States, specific analysis of the theoretical model conclusions were corroborated.On this basis, targeted suggestions put forward China’s foreign direct investment enterprises. Foreign direct investment in companies must first understand their own positioning and development of the host country, and secondly to improve the ability of enterprises to absorb advanced technologies.In addition to pay attention to fully respect the spirit of enterprise contract in the reverse merger, pay attention to safety in the capital chain of green investment.