Outward FDI and Entrepreneurship: The Case of China

Li Shen, Peter Koveos, Xiaodong Zhu, Fei Wen and Jiaxian Liao
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Li Shen: Business School, University of Shanghai for Science and Technology, Shanghai 200093, China
Peter Koveos: Whitman School of Management, Syracuse University, Syracuse, NY 13244, USA
Xiaodong Zhu: Business School, University of Shanghai for Science and Technology, Shanghai 200093, China
Fei Wen: Business School, University of Shanghai for Science and Technology, Shanghai 200093, China
Jiaxian Liao: Business School, University of Shanghai for Science and Technology, Shanghai 200093, China

Sustainability, 2020, vol. 12, issue 13, 1-15

Abstract: Outward foreign direct investment (OFDI) from developing countries, like China, has been growing significantly so far. However, there is surprisingly little research on the effects of OFDI on the home county’s entrepreneurship. In this paper, we initially examine the characteristics of China’s OFDI during the country’s economic reform and opening up. We subsequently test for the hypothesis that Chinese OFDI, along with the Chinese entrepreneurial institutional environment and inward FDI, impacted entrepreneurial activities from the year of 2004 to 2015. We find that OFDI has an inverted “U” effect on entrepreneurial activities, and that the impacts of inward FDI as well as the foreign trade are different in the coastal and non-coastal cities. We conclude by discussing the implications of our findings for researchers and policymakers as well as the limitations of our data.

Keywords: outward foreign direct investment (OFDI); entrepreneurship; China; transitional economy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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