earticle

영어

Chinese outward FDI (foreign direct investment) has reached about 170.1 billion US dollars in 2016, increased by 16.7% compared with last year. This is the first time that China surpassed Japan as the world’s second-largest investors of outward FDI. However, Chinese M&A, as the main form of Chinese outward FDI, is facing a challenge after rapid growth, at the end of 2016. One of the main reasons of the failure is a strict regulatory system in local government, which implies that institutional factors make an important role in Chinese outward FDI. Thus, this paper focuses on institutional factors and uses the panel data from 40 countries, for the years 2003 to 2015, to analyze the features and determinants of Chinese outward FDI. In order to investigate whether there are differences between developed and developing countries, this paper also divides the sample into two parts: developed and developing countries. The estimation results from the whole sample show that the main purpose of Chinese outward FDI is basically market-seeking. Besides, Chinese outward FDI tends to go to the country with good law environment. This is the opposite result of previous studies which supported that Chinese outward FDI goes to countries with bad law environment. For the regulatory quality, the results of developing and developed countries show differently: in developed countries, regulatory has a negative effect on Chinese outward FDI, while regulatory has no effect on developing countries. The level of regulation in developed countries is much higher than that in China, which makes it hard for Chinese Multi-National Enterprises to meet the requirements in developed countries. That is why regulatory has a negative effect on Chinese outward FDI in developed countries. South Korea has a good environment of law and it should make good use of it to attract Chinese outward FDI. It not only can accelerate the economic development of the two countries, but also can promote the friendship between two countries. The contributions of this paper are as followed. First, we use the latest data to investigate the features of Chinese outward FDI in recent years, which updates the understanding of Chinese outward FDI. Second, the results aboutinstitutional factors in Chinese outward FDI are diverse in previous studies. For this phenomenon, this paper gets its own results by using a panel data approach.