The Institutional Environment On The Entry Mode Of OFDI Impact On The Background Of "One Belt And One Road" Strategy

Since the 90s of last century,the pace of economic globalization has been speeding up,the strategic structure of international production has further developed in depth,and productive capital has been flowing frequently in the international context.In 2013,President Xi Jinping proposed the strategic concept of"Silk Road" and "maritime Silk Road in twenty-first Century",which further promoted the development of China's foreign direct investment.According to The Statistical Communique of China's Foreign Direct Investment in 2015,China's foreign direct investment volume jumped to second in the world in 2015 for the first time(after the United States),reaching a new high of $145 billion 670 million.The"One Belt and One Road" national investment from China accounted for 13%of the total flow of the year,$18 billion 930 million.As an important mode of international capital flow,foreign direct investment has become the main driving force for China's economic development and the realization of China's economic globalization.Therefore,the study of foreign direct investment has gradually become an important research topic in academia.However the investment from nations along the "One Belt and One Road" is still challenging.because the countrys along the "One Belt and One Road" are developing countries with economic underdevelopment,political instability,the investment on these countries are still uncertain.Multinational companies are increasing the pace of "going out",one of the choices is the entry mode choice.The decision not only decides whether the enterprise can make foreign direct investment efficiency,but also has important implications for the long-term development of enterprises.Green land investment and cross-border mergers and acquisitions are two main modes of transnational corporations' foreign direct investment.In order to highlight the key points,this paper chooses these two models for analysis and research.This paper first gives a brief overview of the current situation of China's foreign direct investment,and puts forward the background and significance of the topics;secondly,clarify the related concepts into the pattern of OFDI and the effects of foreign direct investment into the model,from which we could have a more comprehensive understanding of the impact of foreign direct investment;Furthermore,from the perspective of enterprise productivity and organizational cost,this paper analyzes the institutional environment's effect on the mechanism of OFDI entry mode,and puts forward two basic assumptions of this paper.Finally,the author makes an empirical test on the influence of institutional environment on OFDI entry model and puts forward some suggestions.The innovations of this study are:(1)many literatures based on macro data or the form of the questionnaire to study the problem,but the author tries to use the information of listed companies.According to the list of foreign direct investment,the author manually collected related investment enterprise information,aimed at improving the accuracy of the results and enriching the related field.(2)Based on the "One Belt and One Road" strategy as the research background,the Chinese enterprises's investment to the country's alonging "One Belt and One Road" events as the research sample,make its research more targeted,systematically analyze the influence of institutional environment on the OFDI entry mode choice.Combined with the existing empirical research,this paper will be divided into formal system and informal system environment,using the global governance index to measure formal institutional environment of the host country.using the Hofstede culture index to measure the informal system environment,finally using logistic regression model to test the factors affecting OFDI model.The empirical results show that:(1)Formal system and informal system environment will have a significant negative correlation to OFDI entry mode choice,that is the countrys alonging the "One Belt and One Road" have more perfect institutional environment,more multinational companies tend to adopt the mode of mergers and acquisitions to enter into the host country market(2)Six dimensions of national governance were brought into the model regressn,by which we found that citizens'calls of the host country and government participation will not impact entry mode of OFDI.(3)The control variables show that the industry of multinational companies and R&D investment will have a significant impact on entry mode of OFDI.When the company belongs to the mining industry,electricity,heat,gas and water production and supply industry high barriers to entry and corporate R&D investment is high,multinational companies are more inclined to use the mode of mergers and acquisitions entering the host country market.According to the results of empirical research,combined with the the countrys'development status and existing national policy alonging "One Belt and One Road",this paper puts forward the policy suggestion.Multinational companies in China should pay attention to foreign direct investment entry mode choice in the investment of countries alonging "One Belt and One Road",and focus on the institutional environment of the host country and its influence on the choice of entry mode.In addition,the government should also build a relatively complete political risk information service platform to help multinational companies identify institutional risks,thereby enhancing the success rate of foreign direct investment.