An Empirical Test on FDI, Financing Channels, Government-Linked Relation and the Export Effect of Private Enterprises

Abstract

China has become the world’s largest FDI recipient and exporting country, however, Chinese consistent policy to encourage multinational exports is suppressing and replacing the exports of local private enterprises restricted
by domestic financing, therefore, these two related research questions appearance in regular sequence: (1) Is there necessary link between Financing constraints and export of enterprise? (2) What is the impact mechanism of
export-oriented multinational companies on local private enterprises export? Using a rich of panel data and Tobit model to carry out the theoretical analysis and empirical testing for the intrinsic relationship among financing channel, FDI and exports of private enterprises, The study found that, labor-intensive industries have a stronger correlation between receiving good bank loans and better export performance with respect to the capital-intensive industry, the export of export-oriented multinational companies with favorable external financing channel is more robust; However, the horizontal or vertical export
spillover effects of foreign-invested enterprises are not obvious. In order to foster the export of local private enterprises, eliminating the discrimination in the financing of private enterprises may be a more effective policy tool compared to rely on the export spillover effects of multinational companies, without a doubt that changing Chinese financing policy is the best choice.