Research On The Financial Decision-making Of My Country's Small And Medium-sized Enterprises' Overseas Direct Investment

Since the 90s of the last century,Global trade and investment have become more and more frequent,global business activities become more and more liberalized.In October 2000,China established the "going out" strategy,and then introduced a series of policies to simplify the procedures for foreign investment approval and relax the foreign exchange management.Since then,a large number of small and medium enterprises began to invest abroad,and created a rapid growth in quantity.The figures show that the middle and small-size enterprises have occupied 70%in the all companies for investing abroad of China.However,due to the lack of scientific and reasonable investment feasibility analysis and decision-making before investment,the success rate of China's small and medium enterprises to invest abroad is very low.How to improve the correctness and rationality of the small and medium-sized enterprises overseas investment decision is an urgent problem to be solved.Based on the analysis of China's small and medium enterprises' causes and motives,This paper analyzes the risk factors such as politics,law,exchange rate and tax for foreign direct investment.And makes a comparative analysis of the advantages,disadvantages and application scope of the methods that commonly used in China for investment decision making,such as the payback period,net present value(NPV)and internal rate of return(IRR).Based on the present situation and problems of the foreign direct investment decision making of small and medium sized enterprises in China,the paper selects the selection principles of small and medium-sized enterprises' overseas investment decision-making methods,and then elaborates how to establish a scientific and reasonable investment decision-making system and procedures.Based on the theory of foreign direct investment of small and medium-sized enterprises which is practiced by the i CHON company in it's American investment project,The rationality and feasibility of the investment decision method selection principles and the decision-making system and procedure are verified.