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Masters Thesis | Finance | China | Volume 9 Issue 10, October 2020 | Popularity: 7.1 / 10

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The Influence of International Direct Investment on Enterprise Performance

Tongna Che

Abstract: In recent years, with the deepening of One Belt And One Road strategy, the scale of China's international direct investment is expanding day by day, but there is no unified conclusion on the impact of international direct investment on enterprise performance. This article during the period from 2014 to 2016 in the a-share listed companies of foreign direct investment as sample data, combined with the enterprise's financial performance and market performance, using the method of principal component analysis, business performance, then use tended to score matching (PSM), regression analysis and other methods to study the effect of international direct investment on enterprise performance. The results show that the performance of enterprises engaged in international direct investment increases after investment, and the improvement of performance has a certain time lag, with a lag period of one year. The heterogeneity of the enterprise test found that the information technology industry, the eastern region, the state-owned nature of the enterprise performance improvement is more obvious. Further research finds that the international direct investment expenditure of listed companies is significantly positively correlated with corporate performance, indicating that the greater the enterprise's international direct investment expenditure is, the more obvious the improvement of corporate performance will be. Therefore, China should continue to encourage the implementation of going out plan, but at the same time, it should pay attention to the formulation of foreign investment strategy, and select countries suitable for enterprises to make international direct investment, so that subsidiaries can better serve the global strategy of enterprises and promote the improvement of enterprise performance.

Keywords: International direct investment, Enterprise performance, Principal component analysis, Propensity score matching

Edition: Volume 9 Issue 10, October 2020

Pages: 1257 - 1264

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