A Multi-dimensional Analysis Of Chinese Exporting Firms’ Transforming Towards Outward Foreign Direct Investment

In the process of enterprise’s development, different enterprise’s actions are different when facing the international market. Some enterprises sell production only in the domestic market, not involved in overseas markets. Some enterprises are not satisfied with the limited domestic market and will enter the international market by way of export trade. The rest will meet the demand of the international market by the way of OFDI. In particular after a period of export trade, some enterprises will enter the foreign market to make strategic expansion by the way of OFDI. For example, Chery automobile received the first export order from Syria in October 2001. Then again at the end of 2011 it established cooperative relations with Iran SKT Company, and got the license for the production and sale from the Iranian government at the end of 2002, which establishing the first step out of the factories overseas. China’s Haier group, TCL international holding company and other companies also invested to build factories overseas after the company products sales gained the rapid development in export. Obviously, in the process of enterprise internationalization, more and more export enterprises in China are facing the choice whether to "going out" strategy. So a Multi-dimensional Analysis of Chinese Exporting Firms’Transforming towards Outward Foreign Direct Investment is of great theoretical and practical significance.First this paper lists the relevant literature about enterprise internationalization, which lay a foundation for the theoretical analysis and empirical analysis part behind. We found that the scholars at home and abroad mostly analyze the internationalization process of the enterprises based on the enterprise heterogeneity theory view, system view and resource view. Secondly, based on the theory of enterprise heterogeneity, we establish a four dimensions theory framework. We find that the process of China’s export enterprises transforming towards OFDI is influenced not only by heterogeneity factors such as productivity, scale, and export experience, but also by sector R&D and institutional environment.On the basis of literature review and theoretical analysis, on the one hand, this paper uses the data set which merging and matching the "China industrial enterprise database" and "the list of foreign investment enterprises (institutions)", and gets the unbalanced panel samples from 1999 to 2009. It involved 12312 export enterprises, of which 1015 are OFDI export enterprises, has carried out 1307 times OFDI activities. Through the descriptive statistical analysis, a scatter diagram and the bar graph analyses of sample data, we can conclude some typical facts about export enterprises transforming towards OFDI:(1) In recent years, enterprise average TFP showed significant growth; (2) The heterogeneity of the two types of enterprises is obvious; (3) Industry distribution is positively related to R & D investment in the industry (4) Regional distribution is positively related to the institutional environment in the region.On the other hand, combined with the typical facts and relevant theory, we put forward some relevant assumptions, and use the binary Logit model and fixed effect panel negative binomial regression model for overall inspection and grouping inspection. The empirical results show that the heterogeneity characteristics such as enterprise scale and the productivity is the key factor to determine whether export enterprises transform towards OFDI. Industry R&D and regional environment regulation variables play significant positive role on export enterprises to OFDI. The enterprise scale not only presents an inverted u-shaped relationship with export enterprise transforming towards OFDI, but also plays a more significant role than productivity. Both the effect of sector R&D and institutional environment on export enterprise transforming towards OFDI are positive. Constrained by China’s OFDI enterprise risks and the percentage of loss-incurring enterprises, the effect of export experience is far lower than the expected effect, the continuous export enterprises is easier to produce path dependence for the rich export experience under the guarantee of profit than the occasional export enterprises. And its power to transforming towards OFDI model is obviously inadequate. Furthermore the regional macro environment has a positive effect on the relationship between enterprise export experience and its export transforming towards OFDI.Finally, this paper summarizes the effect of enterprise productivity, resource view, industry factors, and institutional factors and so on four aspects on export enterprises transforming towards OFDI, and respectively from the Angle of the four aspects put forward the corresponding policy recommendations. We hope that the government and the enterprise could create sufficient conditions to satisfy the multi-dimensional elements of export enterprise transforming towards OFDI in the process of enterprise internationalization.