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Can Host Countries Trade Protection Promote the Foreign Direct Investment Speed of China's Enterprises?——An Empirical Study Based on Micro Data

【Authors】
YU Guansheng, FAN Pengzhen
【WorkUnit】
Wenzhou University, 325035.
【Abstract】

According to the theory of international investment, crossing trade barriers is one of the main motivations of foreign direct investment, and trade protection of host countries is considered to be able to promote the growth of foreign direct investment. Taking this as the theoretical basis, and combining the real situation of anti-globalization in international economy and rapid growth of foreign direct investment of China's enterprises, in this paper we study the influence of host countries' trade protection on foreign direct investment speed of China's enterprises at the micro level. We carry out theoretical and empirical research by referencing the China's Industrial Enterprise Database and Directories of Overseas Investment Enterprises (Institutions), and measuring the enterprises' foreign direct investment speed in light of the time span between the year of enterprises establishment and the first year of foreign direct investment. We find that, due to the alternative relationship between export and foreign direct investment, trade protection of host countries can promote the foreign direct investment speed of China's enterprises, but such effect occurs only in the enterprises which are engaged in export trade and investing in developing countries. Furthermore, for enterprises with a higher share of export and stateowned enterprises, the trade protection of host countries has a greater promotion effect on their foreign direct investment speed.
 
JEL:F21, F61

【KeyWords】
Trade Protection, Foreign Direct Investment Speed, Poisson Regression