How Do China’s OFDI Motivations Affect the Bilateral GVC Relationship and Sustainable Global Economy?

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

General Comments:
This study addresses an interesting and relevant topic by examining how China's outward foreign direct investment (OFDI), driven by different motivations, influences the bilateral global value chain (GVC) relationship between China and host countries. The research evaluates both bilateral GVC trade value and relative GVC positions, contributing to the literature on international investment and GVC dynamics. While the manuscript has merit, several revisions are necessary to improve clarity, formatting, and scholarly rigor before it can be considered for publication.

Specific Comments:

1. Footnotes and References:
• The current manuscript lacks proper use of footnotes as required by the journal's template. Please either integrate footnote explanations into the main text or include them as formal references where applicable.
2. Equation Layout (Lines 286, 394–396):
• Line 286 appears to be a continuation of an equation explanation rather than a new paragraph. Ensure proper formatting to maintain logical flow. Similar issues are found in Lines 394–396. Please revise for consistency.
3. Citation Placement (Line 290):
• The citation on Line 290 is incorrectly placed, appearing mid-sentence rather than at the end of a statement. Adjust citation formatting to follow standard academic conventions (e.g., after a sentence or paragraph).
4. Control Variable Explanation (Lines 299–313):
• The control variables are presented as bullet points with excessive paragraph breaks. For better readability, consolidate these into a continuous narrative without unnecessary paragraph breaks.
5. Table Descriptions (Lines 314–315, 397–398):
• Table 1 (Lines 314–315) and other tables are described in single-sentence paragraphs. Expand the discussion by integrating table explanations into broader analytical paragraphs with multiple supporting sentences.
6. Results Presentation (Lines 437–451, 496–506):
• The findings from Table 4 (Lines 437–451) and subsequent tables are presented in a disjointed, point-by-point manner. Restructure these into cohesive paragraphs (e.g., 2–3 paragraphs per table) to improve readability and narrative flow.
7. Lack of Comparative Literature in Results:
• The Results section does not sufficiently connect findings to prior research. Strengthen the discussion by citing relevant studies that support or contrast with your results. This will enhance the scholarly contribution and validity of your conclusions.

Good luck!

Author Response

 Dear Reviewer,

We sincerely appreciate your thoughtful comments and constructive suggestions, which have been invaluable in improving the quality of our manuscript. We are grateful for the time and effort you have dedicated to reviewing our work.

Please find our response in the attachment.

Please note that the reviewer’s comments are in normal text. Our responses are in bold and blue. The original text of our manuscript is in green, and our revising is in red.

Beset Wishes

Author Response File: Author Response.pdf

Reviewer 2 Report

Comments and Suggestions for Authors

 

Comment on: How Does China’s OFDI Motivations Affect the Bilateral GVC 2 Relationship and Sustainable Global Economy?

 

 

This paper examines how China’s outward foreign direct investment (OFDI) affects the bilateral global value chain (GVC) relationship between China and host countries. Among the main findings, they highlight the fact that OFDI improves Strategic asset-seeking OFDI strengthens the GVC relationship between China and host countries while enhancing China’s GVC position relative to host countries. Additionally, efficiency-seeking OFDI increases the domestic value added of host countries to China but does not improve China’s relative GVC position.  I found the work interesting, and below are my comments for your perusal.

 

 

1. Introduction. They should also provide sufficient justification on the contribution of this study to the literature. Overall, the novelty of the manuscript requires further clarification, and authors should mention the contribution of this paper in different paragraphs.

 

2. Literature review. The literature on OFDI and GVC is not comprehensive. In addition to presenting the results of previous studies on these topics, it should also mention the gaps that this study aims to fill.

 

 

3. Methodology. I suggest the authors devote a subsection to explain their data analytical strategy, and justify the chosen methodologies over others.

 

4. Results. When assessing the significance of the econometric results, what specific type of standard errors is used? Are they ordinary standard errors, heteroscedasticity-robust standard errors, or cluster-robust standard errors? The article does not clarify this issue in the econometric results table. Also, deepen the analysis and interpretation of the results, articulating the findings of this research with those of the reviewed literature.

 

5. Conclusion. Expand the policy recommendation. It should provide a policy recommendation linked to what was found in this study.

 

Comments for author File: Comments.pdf

Author Response

Dear Reviewer,

We sincerely appreciate your thoughtful comments and constructive suggestions, which have been invaluable in improving the quality of our manuscript. We are grateful for the time and effort you have dedicated to reviewing our work.

Please find our response in the attachment.

Please note that the reviewer’s comments are in normal text. Our responses are in bold and blue. The original text of our manuscript is in green, and our revising is in red.

Beset Wishes

Author Response File: Author Response.pdf

Reviewer 3 Report

Comments and Suggestions for Authors

1. The author explicitly states in Hypothesis H1 of Section 3 that strategic asset-based OFDI will significantly enhance China's foreign value-added exports and its status as a GVC (page 5). However, as shown in the main regression table 2 (page 9), the coefficient of OFDI to China's foreign value-added exports (lndva) is significantly negative (-0.082 ***), which means that OFDI has instead suppressed the foreign value-added exports. Although the author attempts to illustrate the "patent absorption effect" through the interaction term lnofdi×lnpat, the core variable itself is negative, which directly contradicts the theoretical setting.
2. The explanation of OFDI in the text regards it as "a channel for promoting mutually beneficial cooperation", and also acknowledges its existence of "substitution effect" in the results. For example, the conclusion states: "China 's OFDI generally substitutes for GVC trade" (p. 18). However, the substitution effect here was not model and identified as the main effect mechanism in the model design. Moreover, DID or instrumental variable methods were not used to strip away the "induced reverse causality". The core conclusion lacks a clear identification path, which is a loophole in double interpretation.
3. The three key interaction terms in the article (lnofdi×lnpat, lnofdi×RCA, lnofdi×nat) are respectively interpreted as "strategic asset absorption", "synergy of economies of scale", and "resource-driven effect", but in the empirical research, they are all only single-layer regression results and no mechanism regression or mediating effect decomposition has been conducted. For instance, the coefficient of the interaction term lpat×lnofdi in Table 2 is 0.010***, but its explanation of "enhancing the status of GVC through technology spillover" lacks a supporting path and does not provide intermediate variables such as production complexity and export structure. Therefore, it is a theoretical substitution of "symbols as explanations".
4. In the GMM estimation of Table 4, the coefficient of OFDI for value-added exports (lndva) changed from negative (-0.082 ***) in OLS to positive (+0.017***), but the authors did not fully explain the conflict between the results of the two methods. The general term "long-run effect through lagged interaction" actually indicates that the data processing and method selection are highly sensitive to the results, and the conclusion is not robust.
5. Table 7 (page 16) shows that for non-high-income countries, OFDI not only failed to increase China's foreign value-added exports (the lndva coefficient is positive but not significant), but also significantly reduced China's GVC status (post coefficient - 0.049***). This directly refutes the conclusion in H1 and H2 hypotheses that "efficiency and resource-based OFDI enhance China's GVC status", yet in Section 6 of the article, it still makes the policy recommendation of "comprehensively enhancing mutually beneficial trade and SDG8 contribution", which is an academic misconduct of "selective interpretation".
6. Many literatures such as Wang & Chen (2020, Panoeconomicus), Li et al. (2021, IRFA), Dai & Song (2020, JFE), etc., have systematically analyzed the influence mechanism of OFDI in China on the status of GVC. And similar TiVA databases, OFDI categorical variables, and GVC Position measurement methods were used. The author failed to directly address the differences between existing models and methodological frameworks in the article, nor did he introduce new variables, new algorithms or theoretical expansions. The original contribution is seriously insufficient.
7. Although control variables such as GDP per capita and openness were included in the model, important explanatory variables that have been widely confirmed in GVC studies, such as industrial technology complexity, policy coordination mechanisms (such as FTA signing), exchange rate fluctuations, and tariff differences, were not controlled. Especially when it comes to technical OFDI, the IP protection index and the reserve of scientific and technological talents in the host country are not controlled, and the risk of variable bias is extremely high, raising doubts about the reliability of the results.
8. References [48] (Zhang et al., 2021) and [60] (Liu & Aqsa, 2020) actually studied the impact of two-way FDI on manufacturing performance. However, the authors used it to support the conclusion of GVC positioning, and the references did not match the actual application. For instance, when [70] - [73] are cited as second-level Chinese journals, the corresponding conclusion is merely "promoting growth in developing countries", but they are cited as "verifying the contribution of this study to SDG 8", which shows obvious overcitation and literature accumulation behavior.

Comments on the Quality of English Language

The English could be improved to more clearly express the research.

Author Response

Dear Reviewer,

We sincerely appreciate your thoughtful comments and constructive suggestions, which have been invaluable in improving the quality of our manuscript. We are grateful for the time and effort you have dedicated to reviewing our work.

Please find our response in the attachment.

Please note that the reviewer’s comments are in normal text. Our responses are in bold and blue. The original text of our manuscript is in green, and our revising is in red.

Beset Wishes

Author Response File: Author Response.pdf

Round 2

Reviewer 3 Report

Comments and Suggestions for Authors

I have no more comments.