Study Of The Choice Of Foreign Investing Methods Among Chinese Electricity Enterprises

Foreign investment has become an important means for enterprises to participate in the process of internationalization and an important factor for the rapid development of the global economy.With the continuous development of economic globalization and the deepening of China’s “going global” strategy,more and more power enterprises choose to invest overseas.The power industry itself is strategically specific,the number of failures in overseas investment is increasing,and the rate of return on overseas investment is declining.Enterprises need to be more careful in their overseas investing activities,and there will be higher requirements for enterprises.To gain benefits from investment activities,it is even more necessary for enterprises to implement correct investment strategies and supporting investment portfolios.As the basic industry in China,during the process of foreign investment,simple foreign trade cooperation and engineering outsourcing can no longer meet the current development of power enterprises.It is of great practical significance to explore the investing model of power enterprises for the successful “going global” of Chinese power enterprises.This article focuses on the choice of power companies on foreign investing methods.First,in the context of economic globalization,it discusses the contradiction between the current situation of Chinese companies investing development on overseas and the failure of overseas investment.Based on the particularity of the industry,it clarifies the importance and significance of power companies on foreign investing methods.Through the research and analysis on domestic and foreign literature,the factors that influence the choice of foreign investing methods of enterprises are discussed,which are mainly considered from the two aspects of enterprises and host countries.After that,it mainly introduces the general situation of China’s overseas investment,the developing status of power companies’ overseas investment at home and abroad.It also puts forward the problems of vicious competition and investing failures in China’s power companies,single foreign investing methods and insufficient innovation.Then through further empirical research,this paper establishes an ordered probit model to estimate,selects the investment projects in the past 11 years from the world’s top 500 power enterprises in 2018,selects variables from the investment motivation of the enterprise and the investment attractiveness of the host country,and tests the robustness of the empirical results based on the model of ordered logit.The empirical conclusions mainly come to the following conclusions: When China’s power enterprises invest in host countries with abundant resources,the probability of choosing an overseas investment method is contract entry,M & A investment,and greenfield investment in turn.When Chinese power companies invest in host countries with more market opportunities,the probability of choosing an overseas investment method is contract entry,M & A investment,and greenfield investment in turn.When power companies invest in host countries with more advanced technology,the probability of choosing an overseas investment method is contract entry,M & A investment,and greenfield investment in turn.The probability of choosing an overseas investment method is contract entry,M & A investment,and greenfield investment in turn.When China’s electric power companies invest in politically unstable countries,the probability of choosing an overseas investment method is contract entry,M & A investment,and greenfield investment in turn.When the policy of investment in the host country is relatively loose,the probability that China ’s power companies choose a overseas investing method is greenfield investment,M & A investment,and contract entry in turn.When the connection degree between China and the host country,the probability of choosing an overseas investment method is greenfield investment,M & A investment and contract entry in turn.Based on the different investment methods of the State Grid Corporation of China in the four countries,this paper discusses the investment attractiveness of the host country,the driving force of selecting a specific investment model,the effect of investment realization,and the test of empirical results.Finally,according to the two problems that have emerged in China’s electric power enterprises,corresponding suggestions and countermeasures have been put forward from the government level and the enterprise level.The main contributions of this paper:(1)Taking electric power enterprises as research objects.The combination of empirical and the case studies are used to analyze the impact of different factors on the choice of investment models of enterprises,and the foreign investment methods have been selected in order,which have certain reference significance for other power companies to “going global”.(2)Analyzing many different investment models of the State Grid Corporation,explore the case of successful profit made by the State Grid’s overseas investment,and use case analysis to test the empirical results,which enriched the internationalization theory.