How Does the Host Country’s Opening to the Outside World Attract Chinese OFDI?

Jie Wang

Global Economic Review, 2025, vol. 54, issue 3, 167-192

Abstract: Using entropy weighting, we measured the openness level of host countries for China's OFDI from 2010 to 2018, and employed a moderated mediation model to examine how host countries' openness influences China's OFDI. Theoretical and empirical analyses show that openness reduces trade costs, thereby promoting OFDI. However, heterogeneity analysis indicates that this mechanism does not apply to resource-rich host countries. Furthermore, global connection distance negatively moderates the first stage of mediation (openness → trade costs), while technological distance negatively moderates both the direct effect of openness on OFDI and the latter stage of mediation (trade costs → OFDI).

Date: 2025
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DOI: 10.1080/1226508X.2025.2545391

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