Multinationals In China Divestment Influencing Factors

Since the reform and opening up,China has always attached great importance to foreign direct investment,according to UNCTAD,the net inflow of FDI in China in 2014 reached $117.6 billion,more than the United States,become the world's largest recipient.However,with the growing FDI inflows,the number of foreign divestment in China is also glowing.According to the China Administration of Foreign Exchange show that in 2013 the number of foreign divestment in my country reached 53.2 billion US dollars,accounting for 15.5%of the total foreign investment of the year.Foreign National Enterprises(MNEs)exit from China have serious impact on China's economy.So it is important for us to analyze the causes of MNEs' divestments in China.China is in an important period of the current economic restructuring,market economic system needs to be improved,in this case,our system factors will undoubtedly have a significant impact on MNEs.Therefore,from the perspective of system factors analyze MNEs' divestments in China is particularly important.This article from our system analyzes the factors affecting the territory of multinational divestment.According to the Heritage Foundation and the Worldwide Governance Indicators segment of the institution,this paper from the perspective of the economic system and political system perspective examines the factors affecting the territory of multinational divestments.We choose divestment flow of multinational companies in China from 1998 to 2013 as sample data,the empirical results show:(1)commercial freedom,trade freedom and fiscal policy freedom in our economic system for multinational territory divestment have a significant effect,in which China's commercial freedom and fiscal freedom on the territory of multinational divestment have significant negative impact,in China,freedom of trade policies have significantly positive impact on the territory of multinational divestment.(2)The regime stability,regulatory quality and control of corruption in China's political system have significant effects on the territory of multinational divestments,the regime stability and control of corruption present negative impact on the divestments,the regulatory quality present a significant impact on the divestments,the impact of legal rules on divestments is not significant.The empirical results show that our country's economic system and political system are the main reasons that influence multinational companies within the territory of divestment.Finally,according to the empirical results,we put forward relevant policy recommendations from the perspective of China's economic and political system for the divestments in China.