Impact of OFDI on investment choice allocations

Yongmin Zhang, Xuewei Liu, Wenjun Tu, Moau Yong Toh and Yuxiao Lai

International Review of Financial Analysis, 2025, vol. 105, issue C

Abstract: This study explores the impact of OFDI on the domestic investment allocation decisions of listed companies in China. We find that OFDI reduces the proportion of a company's investment in short-term financial assets and fixed assets while simultaneously increasing its long-term financial assets and intangible assets. Furthermore, we show that OFDI under the Belt and Road Initiative positively moderates the influence of OFDI on investment in fixed and intangible assets and negatively moderates the OFDI impact on bond investment. In addition, we find heterogeneous effects of OFDIs on investment decisions across companies with different ownership structures, in different industries, and in different regions.

Keywords: OFDI; Investment structure; Belt and road (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:105:y:2025:i:c:s1057521925005307

DOI: 10.1016/j.irfa.2025.104443

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