What drives China’s outward FDI? A regional analysis

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Title: What drives China’s outward FDI? A regional analysis
Author: You, Kefei
Organization: Bank of Finland
Department / Unit: Institute for Economies in Transition (BOFIT)
Series: BOFIT Discussion Papers
Series number: 16/2015
Year of publication: 2015
Publication date: 5.5.2015
Published in: Published in The Journal of Developing Areas, Volume 51, Number 2, Spring 2017: 239-253
Pages: 40
Subject (yso): suorat investoinnit; talouspolitiikka; aluetalous
Keywords: Bofit-kokoelma; Kiina; China
JEL: F21; R11; C11; C23
Other keywords: China; regional outward FDI; home determinants; extended IDP theory; home locational constraints; government policies; Bayesian
Abstract: Our study examines home drivers of China’s regional outward FDI. We propose a theoretical framework that incorporates an extended Investment Development Path (IDP) theory, home locational constraints, policy incentives and geographic factors. Empirically, we employ the Bayesian Averaging Maximum Likelihood Estimates method to address model uncertainty. All proposed theories (except for geographic aspects) are found to provide important perspectives explaining China’s regional outward FDI. Our results highlight the importance of government policies but do not support the original IDP hypothesis that outward investment is automatically generated as income grows. Our findings have implications for both regional and central-government policy.
Rights: https://helda.helsinki.fi/bof/copyright


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