Heterogeneity Of Political Connection And Outward Direct Investment Of Chinese Enterprises:Decision And Institutional Risk Preference

Since 2005,Chinese firms Outward Foreign Direct Investment(OFDI)has been developing rapidly.OFDI of Chinese firms rapid development has benefited from various factors,such as government decentralization,the rapid growth of the foreign exchange reserves,the strategy of "going out" and "one belt and one road",economic transformation and upgrading,international production capacity cooperation and so on.Throughout the development of Chinese firms OFDI,its behavior has strong particularity.Then how to explain the particularity of Chinese firms OFDI?As a developing country,China has significant differences with traditional OFDI countries such as the United States,Japan and the United Kingdom in terms of level of economic development,social system structure,international competitiveness of enterprises and stakeholder relations.The existing mainstream OFDI theory can not fully explain the behavior of OFDI in China.The study based on the new institutional economics found that the government plays an important role in the internationalization of Chinese enterprises and the relationship between the government and the enterprises may affect the OFDI behavior of the enterprises.Practice has proved that the existence of the relationship between government and enterprises has a significant impact on the OFDI behavior of some private enterprises.Private enterprises tend to establish close relations with the government and benefit from the implementation of OFDI.As the private enterprise has become the new force of the Chinese firms OFDI,ownership cannot adequately explain the relationship between government and enterprises,private enterprises can also by participating in politics and form a good political relations with the government and to obtain the resources and advantages for OFDI.Based on it,this article take the political connection depict the relationship between government and enterprises and study the relationship between political connection and the behavior characteristics of Chinese enterprises comprehensive and systematic from two aspects of investment decision-making and institution risk preference.It is of great significance to study the political connection and the decision-making and institutional risk preference of OFDI.In theory,it is helpful to enhance understanding of the behavior of Chinese enterprises OFDI and enrich the theoretical connotation of OFDI in developing countries.In practice,it is helpful to summarize the gains and losses of the strategy of "going out" and provide beneficial policy implications to implement the strategy of "going out" better and provide reference for the government relevant department set up and improve policy and provide some useful ideas for domestic enterprises to go out better.In this paper,the research based on the existing literature review and statistical data collection,to study the issue use of methods to adapt to the principle,the main use of normative and empirical research method of combining.The structure of this paper is divided into the following parts:The first section of this paper is the introduction.This part is a general introduction and bedding for this article.This part mainly elaborates the topic background,structural arrangements and technical route,research method,innovation points and deficiencies.The second section of this paper is the literature review.This part has a comprehensive and systematic review on the classic theory of OFDI and the literature between political connection and OFDI.The third section of this paper is the empirical analysis part and this parts is the core content of the whole article.This part use the micro enterprise data to system investigates the relation between political connection and the enterprise OFDI decision and the location choice.The fourth section of this paper is the conclusion and policy recommendations.Based on the previous analysis and conclusion,this part summarizes the conclusions and put forward policy suggestions.The innovation of this article is reflected in the following two aspects:Firstly,as the private enterprise has become the new force of the Chinese firms OFDI,ownership cannot adequately explain the relationship between government and enterprises.This paper attempts to introduce the concept of political connection directly from the relationship between government and enterprises and systematically research the influence on the decision-making and institutional risk preference of enterprises OFDI.Secondly,through manual sorting the political connection and OFDI location data for Chinese listed industrial enterprises to prepare for conducting empirical analysis.It is helpful to estimate the relationship between political connection and decision-making and institutional risk preference of Chinese enterprises OFDI based on the micro data and understand the behavior characteristics of Chinese enterprises OFDI better.