Distribution, outward FDI, and productivity heterogeneity: China and cross-countries’ evidence

Wei Tian and Miaojie Yu

Journal of International Financial Markets, Institutions and Money, 2020, vol. 67, issue C

Abstract: This paper examines distribution-oriented outward FDI using Chinese multinational firm–level data. Distribution outward FDI refers to Chinese parent firms in manufacturing that penetrate foreign markets through wholesale trade affiliates that resell exportable goods. Our estimations correct for rare-events bias and show that distribution FDI are more productive than non-FDI firms but less productive than non-distribution FDI firms. As cross-border communications costs (transportation costs) increase, there is a higher the probability that firms engage in distribution FDI (non-distribution FDI). Our endogenous income-threshold estimates show that high-productivity Chinese firms invest more in high-income countries, but not necessarily in low-income countries.

Keywords: Distribution FDI; Firm productivity; Linder hypothesis; Rare-events corrections; Threshold estimates (search for similar items in EconPapers)
JEL-codes: F13 O11 P51 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042443120301025
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:67:y:2020:i:c:s1042443120301025

DOI: 10.1016/j.intfin.2020.101218

Access Statistics for this article

Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely

More articles in Journal of International Financial Markets, Institutions and Money from Elsevier
Bibliographic data for series maintained by Catherine Liu ().