Research On The Choices Of Chinese Enterprises’ OFDI Mode

Since the "Going out" strategy was formally established,the Chinese government has formulated and implemented a series of relevant incentive policies,and China’s outward foreign direct investment(OFDI)has made great progress.More and more Chinese enterprises choose to go abroad to carry out transnational business activities.At present,most Chinese enterprises cannot rationally choose the mode of OFDI due to their lack of investment experience.For enterprises,the choice of OFDI mode is the first problem they face in the process of "Going out"." One false step leads to another ",Chinese enterprises choose “Cross-border Mergers and Acquisitions(M&A)” mode or “Greenfield investment ”mode to enter the foreign market,not only will directly affect the success or failure of enterprises’ follow-up transnational business activities,but also will play a role in the host country’s economic development,industrial security and employment etc,cause investment destination countries adopt different policies and actions.Therefore,it is particularly important to study which enterprise heterogeneity factors will influence the choice of OFDI mode of Chinese enterprises.This paper defines the concept of enterprise heterogeneity,Cross-border M&A mode,Greenfield investment mode,reviews the theories related to enterprise heterogeneity such as the new new trade theory,gives a review of the relevant research literature at home and abroad,and summarizes the characteristics of OFDI and OFDI mode,laying a foundation for the following research.The research results of this paper are mainly as follows.First,by establishing the theoretical model of the choice of enterprises’ OFDI mode,this paper draws the inference that enterprises with low productivity will choose Cross-border M&A mode to enter foreign markets,while enterprises with high productivity choose Greenfield investment mode.Second,in the empirical part,this paper establishs the Logit econometric model of the heterogeneity factors of enterprises and the choice of OFDI mode of Chinese enterprises.Using the overseas investment transaction data of Chinese listed enterprises from 2007 to 2015,it empirically tested how the heterogeneity variables of enterprises affect the choice of OFDI mode of Chinese enterprises.It is found that non-state-owned enterprises with lower productivity,larger enterprise scale,higher capital intensity and more investment in research and development are more likely to choose the mode of Cross-border M&A,Otherwise,they will choose the Greenfield investment model.Third,with the change of the location and investment motivation of the parent company,and the industry of the investment target,the influence of heterogeneous variables on the choice of OFDI mode of enterprises will also change.The eastern region has a high degree of marketization,and the regression results of its heterogeneous variables are more in line with the market rules,consistent with the whole sample,and the regression coefficient becomes larger.The regression results of market pursuit motivation enterprises are also basically consistent with the regression results of whole sample,and the significance level and regression coefficient become larger.Compared with the whole sample,the sign of productivity and R&D input variables of technology-acquiring enterprises are reversed.In the case of grouping regression by industry,the sample size of industrial enterprises is the largest,and heterogeneous variables have the most significant influence on the choice of OFDI mode of industrial enterprises,and the coefficient sign of the regression result is the same as that of the whole sample.In addition,the heterogeneity variables of financial,technical service and commercial and trade enterprises with a higher degree of marketization also has a significant impact on their choice of OFDI mode,but it is changed compared with the results of whole sample regression.Fourth,according to the research conclusions,this paper puts forward corresponding policy suggestions from the enterprise aspect and the government aspect,and summarizes the defects and deficiencies of this paper.It is expected that the research in this paper can provide some reference for Chinese enterprises to choose Cross-border M&A mode or Greenfield investment mode.