The Impact Of China’s Outward Foreign Direct Investment On Corporate Governance

With the increasing level of China’s opening up to the world,in response to the "going out" strategy and to meet the urgent needs of enterprise development,more and more Chinese enterprises began to take part in foreign economic activities.As an important foreign activity,OFDI(Outward Foreign Direct Investment)enables Chinese enterprises to quickly acquire advanced and mature technology,knowledge,management and other resources from developed countries,which could shorten the development path and accelerate the development speed.From the perspective of the corporate governance of Chinese enterprises,on the one hand,with the development of the overseas activities and the more complicated structure of the company,the corporate governance is becoming increasingly important.On the other hand,the corporate governance of Chinese enterprises is in the positive improvement,but there are still some problems such as the weakening function of the board of directors and the internal supervision,which is a huge challenge for the future development.According to the Agency Cost Theory,enterprises could improve corporate governance through mergers,equity investment and improvement of employee incentives,etc.However,is it really feasible? This is the research value of this paper.Based on China’s Shen-hu listed company as the research object,select the Csmar database from 2010 to 2014 which has listed companies and its financial,management and other relevant information as the research sample.The article use PSM and DID as the empirical analysis to examine whether the foreign direct investment of Chinese listed companies could have an effect on corporate governance.The results showed that OFDI would have a positive effect on some aspects of corporate governance,and further heterogeneity analysis showed different results for different regions and natures.Finally,I start from the overall conclusion that the Chinese government should adhere to the basic policy of promoting development and establish a reasonable and standard regulatory mechanism to avoid the blindness of OFDI for the enterprises to help it develop well and quickly.In addition,the paper discusses and puts forward suggestions on the different measurement indexes of corporate governance.Besides,the paper come up with policy supports adopted for enterprises of different natures and regions to "suit the case" so as to rationalize the allocation of resources and maximize the effect.