Outward FDI and productivity promotion of exporting firms: firm-level evidence from China

Song Zhang, Haoze Li and Chunlai Chen

International Journal of Emerging Markets, 2021, vol. 17, issue 9, 2218-2238

Abstract: Purpose - The purpose of this paper is to estimate the impact of China's outward foreign direct investment (OFDI) conducted by exporting firms on their productivity. Design/methodology/approach - This study uses two Chinese firm-level datasets. To reduce the bias when merging the two datasets, this study uses a comprehensive link approach to obtain more observations. The propensity score matching method is employed together with the difference-in-difference and difference-in-difference-in-difference approaches to identify the casual effects. Findings - The study finds that exporting firms become more productive through learning effect via OFDI, and the positive impact of OFDI on total factor productivity materializes very quickly but subject to diminishing return. The study also finds that state-owned enterprises gain less learning effect via OFDI than private-owned enterprises, and firms with higher export intensity or larger size tend to gain less improvement in productivity via OFDI. Originality/value - This is one of the first studies to investigate empirically the impact of OFDI conducted by exporting firms on their productivity. In particular, the study analyzes three types of firm heterogeneous factors, namely, ownership, export intensity and size, in affecting exporting firms' learning effect via OFDI.

Keywords: Exporting firms; Outward FDI; Learning effect; Total factor productivity; Firm heterogeneity (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

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:eme:ijoemp:ijoem-07-2020-0795

DOI: 10.1108/IJOEM-07-2020-0795

Access Statistics for this article

International Journal of Emerging Markets is currently edited by Prof Ilan Alon

More articles in International Journal of Emerging Markets from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().