Impact Of Outward Foreign Direct Investment On Chinese Enterprises’ Operating Performance

Under the background of an increasingly open economy,Chinese companies have been scale up their Outward Foreign Direct Investment(OFDI)and are playing a more and more important role in global investment.However,compared with mature multinational enterprises in developed countries,Chinese companies face more challenges in their foreign investment operations.It is worth noting that these companies can have a positive impact on their business performance.Studying the performance impact of Chinese enterprises’ OFDI is of practical significance for rationally measuring the gains and losses of OFDI enterprises and guiding enterprises to make rational overseas investments.Firstly,based on the review of existing theories and literatures,this paper describes the typical facts of the impact of OFDI on business performance.It is found that the average performance level of OFDI enterprises is higher than that of non-OFDI enterprises,and the improvement speed is faster;There are significant differences in the business performance of host countries,types of enterprise ownership and technology-intensive enterprises,that is,compared with state-owned enterprises,the private enterprises and foreign-funded enterprises have higher average performance;the business performance is higher when companies investment in economic development countries;however,companies which is highly intensive in technology have not achieved higher expected business performance.Secondly,this paper uses the matching data of "China Industrial Enterprise Database" and "Overseas Investment Enterprises(Institutions)Directory" from 2005 to 2013,and uses the propensity score matching method to empirically test the impact of OFDI on business performance.The empirical results show that from the perspective of current performance,OFDI enterprises have achieved higher sales profit margin and net profit margin than non-OFDI enterprises;in terms of long-term performance,although the impact of performance is significant in the third period after investment,but its impact coefficient is gradually reduced,indicating that the long-term operating performance of the enterprise OFDI is gradually weakened.Thirdly,based on the classification criteria of host country,enterprise ownership type and technology intensity,this paper tests the difference of OFDI business performance of heterogeneous enterprises.The empirical results show that enterprises that invest in countries(region)with high economic development can obtain better performancereturns;compared with state-ownedenterprises,privateand foreign-funded enterprises have better business performance in OFDI,while the company with highly intensive technology failed to achieve the expected improvement in business performance in OFDI.Finally,on the basis of summarizing the conclusions of the full-text research,this paper proposes corresponding policy recommendations from the perspective of government and enterprises,in order to promote the sound development of OFDI in China and the strategy optimization of enterprise in the process of OFDI.