BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 16/2015:
What drives China’s outward FDI? A regional analysis
Kefei You ()
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.
Keywords: China; regional outward FDI; home determinants; extended IDP theory; home locational constraints; government policies; Bayesian; (follow links to similar papers)
JEL-Codes: C11; C23; F21; R11; (follow links to similar papers)
40 pages, May 5, 2015
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