A Study On The Impact Of Relative Domestic And Foreign Asset Prices On China’s Outward Foreign Direct Investment

The outbreak of the American sub-prime mortgage crisis in 2008 that the foreign market downturn caused by shrinking global financial assets;and in the development of foreign economic slowdown or recession,the implementation of a series of policy Chinese robust monetary policy and expansionary fiscal policy,to reduce the impact of the global financial crisis on China’s economy,the domestic economy in China the healthy development of the state,steady.Over the past ten years,especially after the 2008 global financial crisis,the value of foreign assets has shrunk.China’s foreign direct investment(ODI)has been developing rapidly at this stage.This is not only the result of economic globalization,but also the inevitable choice for China’s own development.The rapid growth of domestic economy and the foreign direct investment of Chinese enterprises have become the focus of attention both at home and abroad.On the one hand,FDI can optimize the allocation of resources in the global scope and maximize asset value,which helps Chinese enterprises to understand FDI better.On the other hand,in the high domestic savings and foreign exchange controls in the background,the yuan has a huge appreciation potential,the domestic enterprises overseas investment regulation,domestic capital output is limited,resulting in domestic asset prices,the relative decline of the corresponding foreign asset prices,the formation of obvious assets relative price difference,so as to promote foreign direct investment for China enterprise,this logic provides advice for the government macroeconomic policy formulation and implementation.In the existing literature,the research scope of the mature theory of ODI is mainly concentrated in developed countries such as the US,Japan and the UK,but there are few studies on outward FDI in developing countries.The development trend in recent years,the rapid development of economy and Chinese Chinese enterprise foreign direct investment way successfully stride forward singing militant songs attracted domestic and foreign scholars pay attention to the Chinese of foreign direct investment,research on the China motive of foreign direct investment is more and more abundant,and the study motivation China of outward direct investment of literature more analysis from seeking market and resources,strategic assets or policy driven direction of China’s foreign direct investment motives,but the research and analysis of Chinese foreign direct investment behavior from the perspective of assets relative price changes is still less,ignoring the function and motivation of foreign direct investment in the global asset allocation in the.China motive of foreign direct investment analysis of the assets from the domestic and foreign relative price point of view,discusses the domestic and foreign assets is the relative price of China’s foreign direct investment effect and asset price relative impact on China’s foreign investment,provides a feasible way for the understanding of China’s foreign investment behavior,contribute to a better understanding of China foreign direct investment behavior.Specifically,first of all,this paper reviews relevant literature on the China enterprise motive of foreign direct investment and asset prices and investment relationship,Tobin Q theory of influence of financing cost on the stock of direct investment model based on the theory of Tobin’s Q will update the assets in the stock cost replacement for investment costs(such as loan cost,risk the fluctuation of asset prices,etc.),the investment model manufacturers construction,and through the manufacturer’s income discounted value of the first order conditions of the maximum calculated discounted expected return value is equal to the cost of financing constraints is firm investment.On the one hand,the cost of financing is reduced with the increase of market value.On the other hand,the discount value of income is expected to decrease with the expansion of the investment scale.So as the value of the market increases,the scale of investment is expanded.According to the asset price change on the cost of financing,that when the domestic asset prices relative to the price of foreign assets to rise,the number of loan businesses have increased,the loan will be used to purchase new production or expansion of assets to foreign direct investment,which will to a positive effect on the Chinese scale of foreign direct investment;then,multinational this paper uses a panel data of 2006-2016 China foreign direct investment,selected Hongkong and the United States,Australia and Singapore in China foreign direct investment flows in 19 countries ranked as the research object,and selected the national real estate market price proxies domestic assets relative prices as the ratio of Chinese on real estate the market price and stock market price and the Chinese stock market price control,the host country of human resources of water The traditional influence factors such as HRP,trade openness level(Trade),market size(GGDP),exchange rate and other traditional investment factors,focus on the impact of asset relative price(RHP&RST)on China’s outward FDI.The empirical results show that domestic and foreign assets relative to the price of China foreign investment has a significant negative impact,when the price of foreign assets compared to the domestic market price is low,the value of foreign assets are undervalued,the relative price of assets has significant effect on China foreign direct investment,further opening in the domestic capital market and financial market background then,to promote the increase of China’s foreign direct investment scale.Finally,based on the theoretical analysis and empirical results,we summarize the paper and give relevant policies and suggestions from the two levels of government and enterprises.