Financial Constraints and Chinese enterprises' Outward Foreign Direct
Abstract Using firm-level
industrial data and outward foreign direct investment data from 1999 to 2010 of
Jiangsu province，this paper examines the effect of productivity and financial
constraints on Chinese enterprises' Outward Foreign Direct Investment decisions.
We find that productivity and financial constraints have significant influence
on investment decisions. Compared to the state-owned enterprises, the influence
of financial constraints on private enterprises is stronger. The impact of
financial constraints change with the level of productivity. The higher the
productivity it is, the more significant the impact will be. Further study
shows that the impact of productivity and financial constraints just influence
whether the enterprise make foreign direct investment and the number of
overseas investment projects. The impact on the scale of investment is not
This paper is published in World Economy Studies, No.9, 2016.