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"First mover advantage" or "second mover advantage": corporate profit margin and Outward Foreign Direct Investment——Test based on micro data of Chinese listed companies

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DOI: 10.25236/cstss.2019.076


Xuefei Yu, Dong Min, Ou’yang Yanyan

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Xuefei Yu


With the gradual deepening of reform and opening up, more Chinese enterprises "go out" of foreign direct investment, corporate profit rate has increased steadily, but few people focuses on the causal relationship between the two in-depth discussion. Based on the micro data of OFDI of listed companies, this paper matches the profit rate of enterprises, and tests the interaction between OFDI and profit rate of enterprises through dynamic simultaneous equations model. The results show that the profit rate of listed companies significantly affects the OFDI of enterprises. One of the influence mechanisms is tax effect. At the same time, the current OFDI of enterprises has a significant negative impact on the profit rate, lagging one has a positive correlation between OFDI and profit rate, and its influencing mechanism changes from "experience acquisition stage" to "profit acquisition stage". Further subdivision test shows that both the OFDI mode adopted by enterprises in mergers and acquisitions and private enterprises will affect the choice of profit rate acting on OFDI behavior, while whether the host country is a developed country has no significant effect on the effect of profit rate on OFDI behavior.


OFDI, profit rate,dynamic panel simultaneous equations