Abstract

From the perspective of money，by introducing dynamic stochastic general equilibrium framework，the study is focused on the effects of exchange rates，trade frictions and other factors on Chinese direct investment outflows.

Specific research methods are as follows：First，the theoretical framework is built for making analysis about the impacts of exchange rates，anti-dumping barriers on firms’ foreign direct investment decisions and conduction mechanism，and then parameter simulations have been given for the verification of related hypotheses and propositions. Secondly，an empirical test is made for the hypotheses. Again，based upon the theoretical and empirical research，the generalizing conduction path diagram is obtained for the impact of exchange rates，trade barriers on firms’ foreign direct investment decisions. By the channels of case studies and comparative analysis within China，Japan and South Korea，the common principles and different features could be found out so as to provide policy recommendations for China. The main conclusions are summarized as：

1. Theoretical analysis shows that monetary volatility could have impacts on firms’ willingness of foreign investment through the channels of “anti-dumping duties” and “exchange rate”. Under certain conditions，with the superposition of the two channels，the rising of domestic（foreign）monetary fluctuations will lead to the intensification of home currency appreciation（depreciation），trade frictions strengthened（weakened）and relative enhancing（weakening）domestic enterprises to avoid trade barriers，and furthermore，promoting（hindering）the formation of domestic firms to invest overseas. Certainly，the effect of domestic monetary volatility on the firms’ willingness to invest overseas is more complex，depending on consumer’s features.

2. Consistent with the expected theoretical results，foreign direct investment behavior in China does exist a set of induced mechanisms and pathways. The empirical results show that by the channels of exchange rate and anti-dumping duties，monetary volatilities have some influences on China’s foreign direct investment. Among them，the role of exchange rate is particularly important and significant. the effect of anti-dumping barriers on Chinese direct investment is depending on export scale. The “induced” effect of tariffs on Chinese direct investment is not significant with the sign uncertainty. In short，with comparison of FDI jumping motives between trade barriers and exchange rate barriers，the latter may be more important.

3. As endogenous variables from money，exchange rate and anti-dumping duties in empirical test will lead to a certain degree of endogeneity problem. In contrast，if monetary volatilities as explanatory variables for regression，the estimate results should be relatively accurate and reliable. The elasticity for China’s monetary volatility to foreign investments is nearly 0.63-0.74.

4. The elasticity for China’s exports，financing cost and energy-seeking to foreign investments is roughly 0.66-0.90，0.53 and 0.35-0.38，respectively. The factors such as exports，financing costs and energy seeking have some impacts on Chinese foreign direct investment.

5. Aiming for anti-dumping barriers，tariff rates seem to have greater degree of influences on them，followed by real exchange rate，and then money factors. Domestic monetary volatilities have significant effects on anti-dumping barriers，with the elasticity of 0.55-0.59，while foreign monetary volatilities have little effects. Empirical test does not support the view that “tariff barriers and anti-dumping duties have the relation of trade-off”. On the contrary，they show a more significant relationship of “complementary”. In addition，empirical studies also show that real exchange rate and anti-dumping barriers are “co-integration”. Home currency appreciation would lead to the enhancement of trade frictions，which supports the theoretical hypotheses.

6. Case studies show that Haier and Huawei’s “going out” strategies really coincide with the theoretical analysis and general conclusions. In the overseas market entry mode selection，Haier follow the principle of “first to obtain market，then to build factories”. This approach supports the conclusion in empirical study in the decision-making process of foreign investment，the size of market share is an important control variable. Haier and Huawei case study further revealed that，regardless of types of FDI，production-orientation or technology-acquisition investments can play the role of jumping trade barriers in function. However，compared with the former，the latter is more based on the long-term interests. Therefore，it is a fundamental strategy.

7. Country Comparative Study results show that in spite of different environment in the process of internationalization，there exist some important common principles in the selections（such as foreign investment inducing factors and mechanisms，etc.），which are basically consistent with the theoretical conclusions and empirical tests.

Keywords：Monetary Volatility；Exchange Rate；Antidumping；Outward FDI