Abstract: This paper tests the effect of total factor productivity and financial constraint on China's OFDI choice. Moreover, the interaction effect of total factor productivity and financial constraint are also displayed. The results show that, the higher the productivity is, the more likely for the firms to operate OFDI, in addition, the lower the financial constraint is, the less likely for the firms to do OFDI. Moreover, total factor productivity and financial constraint are mutual substituted, the negative effect of financial constraint on OFDI choice is larger in firms with lower total factor productivity, that is to say, raising total factor productivity can moderate the negative effect of financial constraint on OFDI choice. Moreover, the interaction effect of total factor productivity and financial constraint is larger in domestic firms and export firms. Raising total factor productivity of domestic firms and especially export firms can moderate the negative effect of financial constraint on OFDI choice,

Key words: Total factor productivity, Financial constraint, Outward Foreign direct investment, Firm heterogeneity