Institutional difference and outward FDI: Evidence from China

Chengchun Li, Yun Luo, Glauco De Vita

Research output: Contribution to journalArticle

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Abstract

This paper investigates the impact of institutional difference on China’s outward foreign direct investment (OFDI) through a gravity model. Our estimations are based on a large panel of 150 countries over the period 2003-2015. The results show that the institutional differences of government effectiveness and control of corruption between China and a host country have a statistically significant negative effect on China’s OFDI. In addition, our empirical evidence suggests that the ‘One Belt One Road’ policy does not have the expected positive effect on China’s OFDI. Consistent results are obtained from a set of robustness tests. Our findings provide a reasonable guideline for countries aiming to attract Chinese OFDI or seeking factors to boost it.
Original languageEnglish
Pages (from-to)(In-Press)
Number of pages26
JournalEmpirical Economics
Volume(In-Press)
Early online date5 Sep 2018
DOIs
Publication statusE-pub ahead of print - 5 Sep 2018

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direct investment
foreign investment
China
evidence
Gravity Model
corruption
road
Robustness
Evidence
Institutional differences
Outward FDI
Outward foreign direct investment

Bibliographical note

The final publication is available at Springer via http://dx.doi.org/10.1007/s00181-018-1564-y

Copyright © and Moral Rights are retained by the author(s) and/ or other copyright
owners. A copy can be downloaded for personal non-commercial research or study,
without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders.

Keywords

  • Institutional difference
  • Outward foreign direct investment
  • Gravity model
  • China

Cite this

Institutional difference and outward FDI: Evidence from China. / Li, Chengchun; Luo, Yun; De Vita, Glauco.

In: Empirical Economics, Vol. (In-Press), 05.09.2018, p. (In-Press).

Research output: Contribution to journalArticle

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