A Study Of Influencing Factors Of Chinese Enterprises' OFDI In Vietnam

In recent years, with the growing strength of Chinese enterprises, as well as the support of the national strategy of "going out", China has transformed from international capital inflow form to outflow form. As one of the most important members of ASEAN, Vietnam has an advantage of abundant and cheap labor supply. As a geographical neighbour, Vietnam has been an important investment destination of Chinese enterprises when making direct investments abroad. Under the background of increasingly closer investment cooperation of China and Vietnam, the paper conducts a study on the influencing factors of Chinese enterprises' OFDI in Vietnam, as well as the location choice, which could provide policy advices and investment reference for the governments and the enterprises.This paper investigates the basic information, effect, influencing factors and location choice of Chinese Enterprises' OFDI in Vietnam by using the theoretical analysis and empirical analysis.First, this paper analyses the basic information of Chinese Enterprises' OFDI in Vietnam in terms of investment scale, sources and distribution and industry. Through the descriptive statistic, theoretical analysis and gravity model, this paper conducts a study on the effect of the OFDI. It can be found that Chinese Enterprises'OFDI in Vietnam have creation effect, while the trans effect is unstable. The OFDI could create export flow, while there is no significant import effect. The reverse technology spillovers and employment effect are limited.Second, this paper conducts an empirical analysis on the influencing factors and its economic significance of Chinese Enterprises' OFDI in Vietnam by using the quarterly time series data from 2004 to 2015. It can be found that the OFDI is significant correlated with the exchange rate movement and Vietnam residents' consumption ability. Also, the OFDI is influenced by China's GDP, Vietnam's labour cost, amount of exports and Vietnam's market openness. While, the effect of indirect induced factor interest spreads is not significant at the present stage.Finally, this paper conducts an empirical analysis on the influencing factors of location choice of the FDI in Vietnam by using the panel data from 2005 to 2012. It can be found that the labour cost, potential labour supply and gross construction output have significant effect on the FDI inflow in each province and city in Vietnam. Also, the retail sales of products and services, population densiy, telephone density and highway transportation capacity have a positive influence, while the eduction level of labour is not significant at the present stage. Combining with the location choice of Chinese Enterprises' OFDI in Vietnam, it can be found that most of the FDI are cost oriented investment.