Financing Constraints, Exchange Rate Risk of Host Country and Location Choice of Enterprises’ Foreign Direct Investment——An Empirical Study Based on Micro Enterprises’ Data of Zhejiang Province
Abstract：Financing constraints and exchange rate risk of host country are domestic and foreign factors which will hinder the stability and sustainable development of China’s enterprises foreign direct investment, so the interaction influence of these two factors on location choice of foreign direct investment is also crucial. Based on this, in this paper we study the foreign direct investment choice of host countries’ exchange rate risk during financing constraints. Through modeling the negative influence of revenue losing and the positive influence of financing cost reducing, our model finds that foreign direct investment enterprises with higher financing constraints tend to go for host countries with higher exchange rate risk in location choice. In empirical study, we match multiple database to construct the micro level data, and use two international data sources to measure exchange rate risks of host countries. Our empirical study finds that foreign direct investment enterprises with higher financing constraints tend to choose higher exchange rate risk countries through binary choice model and sorting model. The result of bivariate binary choice model ensures the robustness of our empirical research. Based on the comprehensive theoretical and empirical research results, we find the existence of financing constrains improves the risk preference in the foreign direct investment location choice.
余官胜. 融资约束、东道国汇率风险与企业对外直接投资区位选择——基于浙江省微观企业层面数据的实证研究[J]. 浙江工商大学学报, 2017, 31(6): 87-96.
YU Guansheng. Financing Constraints, Exchange Rate Risk of Host Country and Location Choice of Enterprises’ Foreign Direct Investment——An Empirical Study Based on Micro Enterprises’ Data of Zhejiang Province. Journal of Zhejing Gongshang University, 2017, 31(6): 87-96.
2017, Vol. 31 
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