The Research On The Impact Of Government Governance Of The Host Country On The Location Choice Of Outward Foreign Direct Investment Of Chinese Enterprise

Location choice is one of the important strategies for Chinese enterprises to Outward Foreign Direct Investment(OFDI),Whether the location choice is correct or not affects not only the enterprise's overseas investment layout and the improvement of its benefit,but also the survival and development of the enterprise.The government governance of the host country,as a key factor affecting the location choice of enterprises' OFDI,needs to be paid enough attention by the enterprises.Therefore,it is of great significance to study how the government governance of the host country has an impact on the location choice of Chinese enterprises' OFDI.From the current literature,most domestic and foreign scholars mainly focus on location endowments,factor endowments,taxes,trade policies,exchange rates,infrastructure and so on.Some scholars try to analyze the location choice of OFDI from the institutional factors,but it is also studied from the aspects of institutional risk and economic risk.Few scholars analyze the location choice of enterprise OFDI from the perspective of government governance.Based on this,this paper tries to use the latest government governance indicators to study the impact of government governance of host country on the location choice of Chinese enterprises OFDI.This paper selects the panel data of 54 host countries for 2011-2015 years to carry out an empirical analysis.The results of the empirical study are as follows: The government governance level of host country has an important impact on location choice of Chinese enterprises OFDI.However,there are great differences between the various indicators of government governance in the host country.Specific performance: In the total sample,the government's Control of corruption(CC),the government effectiveness(GE)and the rule of law(RL)have passed a significant test,and all have positive correlation with Chinese enterprises OFDI.It shows that Chinese enterprises OFDI tend to flow to countries with low corruption,higher government efficiency and higher level of rule of law.In the sample of developing countries,the level of government's control of corruption(CC),the government effectiveness(GE)and the rule of law(RL)have been tested significantly,and all have positive correlation with Chinese enterprises OFDI.It shows that Chinese enterprises are paying more and more attention to the government governance level when they invest directly in developing countries.In the samples of developed countries,only the government effectiveness(GE)and the regulatory quality(RQ)have passed a significant test.it shows that there are great differences in the influence of government governance in developing and developed countries on the location choice of Chinese enterprises OFDI.Based on the results of empirical research,this paper puts forward the following suggestions for location selection of Chinese enterprises' OFDI from government and enterprise: The government should strengthen bilateral relations with other countries,build and improve the legal system of foreign direct investment,and provide information support for location choice of Chinese enterprises' OFDI;Enterprises should do a good job of evaluating the government governance of the host country,further improving the corporate governance structure,and promoting the diversification of the investment region.