The Location Choice Research Of China’s Outward Foreign Direct Investment For The Perspective Of Institutional Distance

As of 2015,the statistical data showed the volume of Chinese foreign direct investment(OFDI)reached a new high point in history with $145.67 billion,ranked second in the world,and achieved a net capital output for the first time.China has gradually been the capital exporting country from the introduction of capital.But the statistics of China’s outward foreign investment has shown that the investment efficiency is not high,one reason is that the location choice decision is wrong,that many companies select the location with blindly push bar.At present,the academic circles have made a wealth of research on the location choice of OFDI in China,but they mainly focus on the study of the investment motive and unilateral institutional factors.But the influence factors of location choice are complexity,to analyze the results obtained is biased if only from the investment motives or from home or host institutional system.At the same time,they mainly analyze based on macro data.But individual enterprises’ and national macro level’ goals are not entirely consistent,individual information characteristics of micro enterprise is easy to be covered by the macro data,so this paper collects Chinese micro enterprises’ foreign direct investment data in 2003-2014,makes a comprehensive analysis of the selection of Chinese enterprises OFDI location from the perspective of institutional distance.Institutional distance can bring the advantages of the system,may also have disadvantages,so Chinese enterprises should choose appropriate location when invest in relevant countries.This paper also makes a theoretical analysis of institutional distance how influences the OFDI location choice of China enterprises.By constructing a logit model,this paper has the following conclusions:(1)no matter is the main formal distance or the dimensions of the formal system(the political and economic and legal system)are to promote Chinese enterprises OFDI for the overall sample.(2)the formal institutional distance for Chinese enterprises location choice of OFDI has an asymmetric effect: when investing the developed countries,China’s enterprises tend to choose large institutional distance countries,and when investing the non developed countries,Chinese companies has the opposite selection criteria.(3)the informal distance(cultural distance)and location choice is negatively correlated.