Host country economic policy uncertainty, trade openness and Chinese enterprise overseas investment

Lingmin Xiao, Liang Zhao and Qianyu Zhu

International Review of Economics & Finance, 2024, vol. 96, issue PA

Abstract: This study mainly analyzes the link between host country economic policy uncertainty (HEPU) and Chinese enterprises' outward foreign direct investment (OFDI) and finds that HEPU negatively influences Chinese enterprises' OFDI. The increase of HEPU will inhibit market-oriented and technology-oriented OFDI, while resource-endowed OFDI is insignificant. In addition, where trade openness plays a mediating role and the results of the heterogeneity analysis show that the economic policy uncertainty of developed countries has a more significant influence on Chinese enterprises' OFDI. In contrast, the economic policy uncertainty of developing countries has a relatively minor influence on Chinese enterprises' OFDI. This paper provides a reference for Chinese enterprises' OFDI, as well as suggestions for the state and government to formulate economic policies, so that Chinese enterprises can maintain competitiveness and realize sustainable development in the ever-changing global economic environment.

Keywords: Host country; Economic policy uncertainty; Chinese enterprises' OFDI; Trade openness (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:96:y:2024:i:pa:s1059056024005586

DOI: 10.1016/j.iref.2024.103566

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