Study on the location choice of Chinese outward foreign direct investment

Chao Yu¹, Zongshan Pu², Lei Chen²

¹College of Cooperative, Qingdao Agricultural University, Qingdao, Shandong, China, 266109

²Sichuan Normal University Chengdu College, Chengdu, Sichuan, China, 611745

With the steady implementation of the “Go Out” strategy, China has been developing rapidly in the outward foreign direct investment. This paper, based on the 2003-2012 panel data of Chinese outward foreign direct investment, applies systematic GMM model and variable intercept model to study the location choice of Chinese outward foreign direct investment. Research findings show that, the resource endowment and bilateral trade of the host country have significantly positive impacts on Chinese outward foreign direct investment, whereas the market size and technical merit of the host country bring about significant negative impacts. Therefore, domestic corporate outward foreign direct investment should still focus mainly on resource acquisition and trade complementarity rather than acquiring technologies.