Firm Heterogeneity, Political Risks and OFDI Firms’ Performance

This study was focused on the impacts of firm heterogeneity and political risks of destination countries on China’s OFDI firms. A sample of 538 Chinese manufacturing firms investing in ASEAN countries are investigated from year 2005 to year 2013. Factors indicating firm heterogeneity as total assets, sectors of investment, location, operating experience, OFDI experience and export status are applied, while factors as political stability and government effectiveness of destination countries are applied, and economic environment as openness, market size, level of affluence of residents and labor size of destination countries are used as control variables. Findings show that assets level is an important factor for OFDI firms’ performance, and China’s OFDI firms investing in ASEAN countries have presented a risk preference.