Search Results (88)

The purpose of this paper is to analyze how China’s outward foreign direct investment (OFDI), driven by different motivations, affects the bilateral global value chain (GVC) relationship between the home country (China) and host countries, evaluating both bilateral GVC trade value and relative GVC positions. Employing the OECD Trade in Value Added (TiVA) database combined with Chinese listed firm data, we found the following results: (1) Strategic asset-seeking OFDI strengthens the GVC relationship between China and host countries while enhancing China’s GVC position relative to host countries. (2) Efficiency-seeking OFDI increases the domestic value-added exported from host countries to China but does not improve China’s relative GVC position. (3) Natural resource-seeking OFDI enhances bilateral GVC trade volumes but has no significant impact on the relative GVC positions of China and host countries. (4) China’s OFDI, not driven by these motivations, generates a trade substitution effect between home and host countries. We also examined the heterogeneity of these effects. Our findings suggest that China’s OFDI fosters equitable and sustainable international cooperation, supports mutually beneficial GVC trade and host-country economic growth, and therefore, progresses toward Sustainable Development Goal (SDG) 8. Full article

Global value chain (GVC) restructuring has important implications for the transformation of corporate outward foreign direct investment (OFDI), a process that is closely linked to sustainable economic development. Based on panel data from 2007 to 2021, this paper comprehensively applies the fixed effects model, mediation effects analysis, heterogeneity test, and regression analysis to explore how global value chain restructuring promotes the sustainable transformation of corporate OFDI, and it examines the role mechanisms of factor endowment and market scale expansion in the process. The conclusions are as follows: (1) Global value chain restructuring can promote manufacturing enterprises’ OFDI transformation. (2) Global value chain restructuring promotes the transformation of manufacturing OFDI through two channels: factor endowments and market scale. (3) Against countries’ different backgrounds, there are significant differences in the impacts of global value chain restructuring on enterprises’ OFDI. The research results of this paper can provide important insights for relevant government departments and enterprises in formulating management policies. Full article

Amid the global trend of green transformation, existing studies have explored the impact of outward foreign direct investment (OFDI) on economic performance and technological innovation. However, micro-level empirical analyses on how OFDI facilitates green technological innovation through capital and knowledge channels remain insufficient. Drawing on data from China’s A-share listed companies during 2007–2022, this study systematically investigates, for the first time, the pathways through which OFDI influences green innovation, and identifies the mediating mechanisms of financing constraints and R&D investment. Employing fixed effects and mediation effect models, the empirical results reveal that OFDI significantly promotes firms’ green technological innovation, with stronger effects observed among state-owned enterprises, among non-polluting firms, and in the context of invention patent applications. This study enriches the theoretical framework of green innovation and provides empirical evidence and actionable insights for corporate “going global” strategies and green transition policy making. Full article

Under the pressure of the global low-carbon transition, green initiatives have gradually emerged as a critical direction for outward foreign direct investment (OFDI). In the context of China’s high-level opening up, environmental, social, and governance (ESG) performance can promote sustainable development of firms. However, there is lack of research on the influence of ESG performance from the perspective of corporate green OFDI. This study examines the impact mechanism of ESG performance on corporate green OFDI in terms of its propensity and depth, using a sample of Chinese A-share listed firms from 2009 to 2023. The findings indicate that ESG performance promotes corporate green OFDI, a result that remains robust after a series of endogeneity and robustness tests. The internal mechanism analysis reveals that ESG performance enhances corporate green OFDI by reducing financing constraints and managerial myopia and by promoting risk-taking and foreign institutional investors’ shareholdings. The external mechanism analysis verifies that ESG institutional constraints in the home country and ESG locational advantages in host countries strengthen the positive effect of ESG performance on corporate green OFDI. Further analysis shows that ESG performance facilitates corporate green innovation development through collaborative and independent innovation by promoting corporate green OFDI. By extending the theoretical understanding of the impact of ESG performance on the process of corporate green OFDI, this study provides strategic guidance for the sustainable development of firms in China and other similar developing countries. Full article

The Chinese government encourages enterprises participating in the Belt and Road Initiative (BRI) to improve their ESG performance to better align the BRI with sustainable development. This paper reveals the heterogeneous treatment effect of the BRI on the ESG performance of enterprises using time-varying DID and DDD models, powerfully validating that the BRI promotes the ESG performance of participating enterprises. According to our mechanism analysis, the BRI promotes the ESG performance of enterprises involved in international infrastructure projects and the development of trade routes. However, it has no significant impact on enterprises involved in outward foreign direct investment, exploring international markets, and providing support services and others. According to our heterogeneity analysis, the BRI promotes the ESG performance of state-owned enterprises (SOEs) more than that of non-SOEs, the ESG performance of non-manufacturing enterprises more than that of manufacturing enterprises, and the ESG performance of enterprises on the Main Board more than that of enterprises on other boards. These findings can provide policymakers and enterprise managers with guidance on improving ESG performance and clarify the micro-level empirical evidence of the performance of the BRI in implementing sustainable development. Full article

Digital transformation has become a crucial strategic decision for enterprises to strengthen international competitiveness and achieve sustainable development. This study aims to investigate the impact of digital transformation on outward foreign direct investment (OFDI) performance and the conditions that influence this relationship using the ordinary least-squares regression estimation method and the data of Chinese A-share listed enterprises. The results show that digital transformation improves OFDI performance. The mechanism analysis verifies that digital transformation enhances OFDI performance by promoting corporate reputation and innovation. The moderating analysis demonstrates that the host country’s digital infrastructure negatively moderates the positive relationship between digital transformation and OFDI performance, while diplomatic relations between home and host countries play a positive moderating role. The heterogeneity analysis reveals that state-owned, labor-intensive, and technology-intensive enterprises and enterprises investing in non-Belt-and-Road countries benefit more from digital transformation to promote OFDI performance. This study extends the OFDI theory of emerging market enterprises in the context of digital transformation and provide practical implications for improving the OFDI performance of multinational enterprises. Full article

Numerous studies have explored the impact of Outward Foreign Direct Investment (OFDI) on upgrading industrial structures in home countries. However, a notable gap exists in the literature regarding the reverse relationship. Based on the cross-border greenfield investment data of Chinese provinces in Association of Southeast Asian Nations (ASEAN) countries from 2003 to 2021, this study employed the Ordinary Least Squares (OLS) model to evaluate the impact of industrial upgrading in each province on OFDI to address this gap. The findings suggest that China’s industrial structure upgrading significantly promotes OFDI toward ASEAN countries, though the effect varies by region within China and by the income levels of host countries. Regionally, industrial upgrading in eastern China notably stimulates OFDI growth, while the effect is not significant in the central and western regions, reflecting inconsistent evolution of industrial structures in various regions. Regarding host country income levels, the promotion effect of industrial structure upgrading on OFDI is influenced by the economic development level of the host country. Furthermore, we find that R&D intensity acts as a moderator that links industrial structural upgrading to OFDI responses. These findings withstand robustness checks, including tests for endogeneity. Ultimately, this study provides policy insights for strengthening the virtuous cycle between industrial upgrading and OFDI. Full article

Based on the current unpredictable patterns of globalization and the impact of the COVID-19 pandemic, global value chains (GVCs) are undergoing restructuring. The resolution of the 20th Communist Party of China National Congress emphasizes high-quality development and the “going out” strategy. It highlights the crucial role of global value chain reconstruction in driving the high-quality development of outward foreign direct investment (OFDI). Innovation is crucial in reaching this high-quality development objective. This study uses Jiangsu Province in China as a case study to estimate the relationship between the innovative direction of the high-quality development indicator score system for Jiangsu Province’s reverse OFDI and global value chain restructuring from 2007 to 2021. The findings indicate that global value chain restructuring has a suppressive effect on the innovative direction of high-quality development in Jiangsu’s reverse OFDI. Additionally, further heterogeneity analysis reveals that urbanization levels mitigate the negative impact of global value chain restructuring on the innovative direction of high-quality development in Jiangsu’s reverse OFDI. Full article

The potential risks arising from excessive supply chain concentration have received more and more attention. In practice, high supply chain concentration hinders firms’ sustainable development, especially for firms in emerging markets. However, how to reduce supply chain concentration remains an underexplored problem. Outward foreign direct investment (OFDI) has been an important strategy for firms to reallocate and optimize their supply chain relationships. Thus, we tried to explore whether OFDI can serve as an effective method to reduce supply chain concentration by analyzing their relationship. Using the data of Chinese A-share listed firms from 2008 to 2022, this paper empirically examines the impact of OFDI on supply chain concentration through a two-way fixed-effects model. We find that OFDI significantly reduces supply chain concentration, and this conclusion still holds after using alternative measures of the independent variable and dependent variable, endogeneity treatment, the Heckman two-stage model test, controlling for provincial factors, and excluding special samples. Channel analysis reveals that OFDI reduces supply chain concentration mainly through increasing market share, enhancing innovation capacity, and improving reputation. Cross-sectional analysis shows that the negative effect of OFDI on supply chain concentration is more pronounced in state-owned firms, firms under high industry competition, and high-tech firms. Our findings have important implications for firms to build sustainable supply chain relationships and strengthen supply chain resilience, and for policymakers to guide OFDI reasonably. Future research could further explore the effect of firms’ investment decisions on supply chain configuration. Full article

Recently, China has actively advocated green transformation in manufacturing. This paper applies the Malmquist–Luenberger (ML) index method to measure the green total factor productivity (GTFP) and its decomposition of 28 segments of China’s manufacturing industry from 2004 to 2020; then, it empirically investigates their causal relationship and impact mechanism on bidirectional foreign direct investment (FDI). The results show that inward foreign direct investment (IFDI) and outward foreign direct investment (OFDI) significantly inhibit GTFP, whereas the interactive development level between the two (DFDI) significantly promotes GTFP during the sample period. After decomposing GTFP, it is found that IFDI or OFDI has a significant promotional effect on green technical change (GTC) but an inhibitory effect on green technical efficiency change (GEC), while DFDI has a promotional effect on GTC or GEC. Further research also finds that OFDI can effectively weaken the inhibitory effects in the long run; IFDI, OFDI, and DFDI have the same direction of impact on GTFP or GEC, only showing heterogeneity at the significant level, while their impact on GTC has uncertainty in different types of manufacturing industries. The more rational the manufacturing industry structure, the more significant the promotional effect of IFDI, OFDI, and DFDI on GTFP. Full article

China is currently in a crucial phase of establishing a new domestic and international “dual circulation”, and a new model of sustainable development. OFDI and environmental investment play significant roles in both external and internal economic cycles. In this study, we constructed a multi-period difference-in-differences (DID) model, using data from listed companies in China from 2008 to 2022, to analyze how OFDI impacts domestic environmental investment and its underlying mechanism. The findings demonstrated that OFDI can significantly reduce the environmental investment made by domestic enterprises. There exists a capital competition relationship between these two activities due to financing constraints, although OFDI can mitigate environmental issues by reducing pollution emissions and promoting industrial structure upgrading within the home country, resulting in savings on environmental investments. Heterogeneity analysis revealed that the negative impact of OFDI on environmental investment is primarily observed in non-state-owned enterprises, firms investing in developed countries, and those subject to strict environmental requirements imposed by host governments. This study explains the internal logic of China’s environmental investment reduction from the perspective of OFDI, deepens the study of the environmental consequences of OFDI, broadens the applicable boundaries of the theory of OFDI’s impact on environmental investment, and provides insights for the government to establish a high-level opening-up pattern and address the dilemma of environmental governance. Full article

This paper examines the outward foreign direct investment events of Chinese manufacturing firms from 2008 to 2022. It explores how sunk cost and performance feedback drive firms’ foreign exit strategies based on the behavioral theory of the firm. Additionally, it also examines the contextual factor that may affect the focal relationship. We adopt a panel logistic estimation to test the hypotheses. The conclusions show that firms are more likely to exit overseas markets when faced with sunk costs and negative performance feedback. Conversely, positive performance feedback significantly decreases the probability of firms exiting foreign markets. Additionally, environmental munificence and complexity can weaken the strength of the focal nexus to some extent. These findings hold both theoretical and practical significance for multinational enterprises and the government in the context of the ‘dual-circulation strategy’. Full article

Scientific consensus affirms human activity, particularly carbon emissions from market participants, drives global warming. Foreign investment, crucial for sustainability in developing nations, now faces scrutiny regarding its impact on environmental quality in emerging economies. This study examines the influence of Chinese Outward Foreign Direct Investment (OFDI) and fintech on environmental conditions in the top five Chinese-invested African economies, alongside factors such as energy consumption, economic performance, and unemployment affecting CO₂ pollution. Quarterly data from 2006–2021 confirm cointegration among variables via panel unit root and cointegration tests. Panel ARDL method estimates coefficients for short and long-run effects. Our findings reveal: (1) A 1% increase in Chinese investment leads to a 0.56% decrease in CO₂ emissions, supporting its positive environmental impact. (2) Fintech adoption also demonstrates a beneficial effect, with a 1% increase associated with a 0.18% reduction in CO₂ levels. (3) Total energy consumption, as expected, has a detrimental impact, causing a 0.92% increase in CO₂ emissions with a 1% rise. (4) Interestingly, economic growth fosters environmental sustainability, while unemployment correlates negatively with it. These findings suggest that targeted Chinese investments and fintech adoption can aid in mitigating CO₂ pollution in African economies while balancing economic considerations. Full article

From the perspectives of ownership dispersion degree after the entry of foreign shareholder and the foreign ownership participation level, respectively, this paper takes Chinese hybrid OFDI state-owned listed industrial companies from 2007 to 2019 as samples, using 3799 observations, to study the impact of foreign ownership on the innovation of OFDI SOEs. We find that compared to the ownership dispersion degree after the entry of foreign shareholder, the foreign ownership participation level plays a more active role in the innovation of OFDI SOE. This positive effect is stronger for non-state-holding enterprises and high-pollution industries. Further analysis reveals that the relationship between foreign ownership and the innovation of SOE is mediated and moderated by the host country’s innovation level and government innovation subsidies, respectively. In addition, in comparison with the ownership dispersion degree after the entry of foreign shareholders, the mediating effect of the host country’s innovation level and the moderating effects of government innovation subsidies are significantly enhanced by the foreign ownership participation level. These findings can promote the study of the relationship between mixed-ownership reform and the innovation of Chinese OFDI SOEs. By verifying the impact of foreign ownership on the effectiveness of OFDI SOE innovation, this paper provides a new perspective on the study of mixed-ownership reform. This paper aims to expand the research field on the relationship between mixed-ownership reform and OFDI SOE innovation, providing theoretical implications and facilitating the policy design of promoting SOE reverse technology spillovers through their governance structural reform. Full article

The governance exerted by governments plays a pivotal role not only in driving local economic advancement but also in bolstering environmental management and enhancing Carbon Productivity (CP). This paper investigates the impact of two-way Foreign Direct Investment (FDI) coordination development (DFDI) on China’s CP from the perspective of fiscal decentralization (FD). Utilizing panel data from 30 Chinese provinces spanning 2006–2020, we apply a Spatial Error Model to discern that DFDI effectively elevates CP. However, an excessively high degree of FD constrains the potential environmental performance benefits that FDI might offer. Further analysis using a Dynamic Threshold Model reveals a significant dynamic non-linearity in the impact of DFDI on CP under the threshold effect of FD. In contrast to Inward FDI (IFDI), China’s Outward FDI (OFDI) actually impedes the enhancement of CP. Our results underscore that well-calibrated FD can align economic growth with environmental sustainability. This study offers insights into policy frameworks fostering sustainable development in China and similar economies. It indicates that tailored policies are essential to mitigate the diverse environmental impacts of different FDI flows, supporting sustainable investment practices. Full article