HAN Jian：The Effect of Home Country's Service Industry Development on Firms' OFDI——An Empirical Study Based on OECD Data

Abstract：This paper introduces the theory of heterogeneous firm's investment and trade and analyzes the theoretical mechanism of home country's service industry development on firms' outward foreign direct investment(OFDI).The results indicate that service industry development will promote the productivity of manufacture and service firms, thus improving the capacity of international investment.The decrease of fixed and variable cost will reduce the entry barrier of firms' OFDI and increase a country's OFDI.We use the data of 30 OECD countries from 1990 to 2011 and investigate the influence of total service industry, wholesale and retail trade, transport and telecommunication, financial intermediation, business consulting and technology services development on OFDI.This paper finds that the scale and efficiency of producer service industry can promote the growth of OFDI.The results have important policy implication for China government's going-out policy.

Key words： Service Industry    Producer Service Industry    OFDI

source:Finance & Trade Economics ,No.3,2015