Study On The Self-selection Effect Of Foreign Direct Investment In Chinese Manufacturing Industry Using The Theoretical Framework Of Firm Heterogeneity

With the development of economic integration,economic dependence between countries is increasingly high.And under the circumstances,international trade is becoming an important part of a country's economic growth.However,with the increase of China's export trade,products made by China which have a low price are suffering from a growing number of tariff and non-tariff barriers in the international market,such as anti-dumping,green barriers,technical barriers to trade.To a great extent,these export barriers have reduced the export profits of enterprises in China.So,in order to promote the development of the economy,the government and companies begin to pay attention to the outward foreign direct investment.At the same time,it has a profound significance to research outward foreign direct investment in China,because of its great impact on the increase of our country' and the world economy,especially in the theory instruction of China's strategy of "going out" and in the reality of the international financial crisis.In this paper,we study the outward foreign direct investment from the micro level of enterprise using the theoretical framework of firm heterogeneity.On the basis of the existing literature and the description of the current status in manufacturing foreign direct investment enterprises,this paper devotes to studying the self-selection effect of the outward foreign direct investment in manufacturing industry.On the other words,it is mainly to research whether the high productivity of the manufacturing enterprises is the core factor to select outward foreign direct investment in China.This paper uses the research methods of combining theory analysis and empirical analysis.Based on the analysis of the firm heterogeneity model,this paper uses the relevant data of China's industrial enterprise database for empirical analysis.At the first,it analyzes the changes on the productivity of outward foreign direct investment enterprises in China,using the data of the manufacturing enterprises from 2008 to 2010.Then,it especially selects data of the manufacturing industry in 2010 as the research subject and considers the multivariate heterogeneity,and then it carries out empirical analysis on manufacturing export enterprises and foreign direct investment enterprises with the way of “Logit” model.At the same time,this analysis of the self-selection effect in manufacturing industry includes two major aspects,one is the overall data analysis,and another is the micro-vertical research.In this paper,the results of the empirical analysis are as follows.Firstly,one of the results is that the self-selection effect consists in the overall manufacturing outward foreigndirect investment generally,which means that the manufacturing industry which has the higher productivity will tend to select outward foreign direct investment than others.And besides the productivity,the profits,the per capita wage,the capital of enterprises and the nature ownership all influence the decision which firms select outward foreign direct investment or not.Secondly,the study of manufacturing industry segment shows that not all micro-vertical industries have the self-selection effect.For most industries,the productivity is not the determinant for enterprises to select outward foreign direct investment.This means that firm heterogeneity theory can not apply to our manufacturing industry fully.Thirdly,combing the empirical analysis with the reality of our manufacturing industry,this paper puts forward the corresponding suggestion on our enterprises which select export and outward foreign direct investment,in order to promote the development of China's enterprises.