The Impact of China’s Overseas Emigration Network on Outward Foreign Direct Investment

Yechi Ma, Zheng Fu, Weixian Jiang, Yuhong Liu and Zilong Wang

Emerging Markets Finance and Trade, 2023, vol. 59, issue 13, 3928-3939

Abstract: Emigrants can reduce information asymmetry and provide community enforcement of contracts across international boundaries. This study investigates the impact of China’s overseas emigration network on OFDI with a particular focus on the intensive and extensive margins of OFDI. Using data from 116 countries during the 2005–2019 period, we find that more emigrants in a given country promote both the intensive and extensive margins of OFDI and thus promote OFDI into that country. Furthermore, we find that the positive effects of the emigration network on OFDI only exist among non-high income host countries and non-Belt and Road host countries. Finally, during periods of high global economic policy uncertainty, the positive effect of the emigration network on the extensive margin and OFDI is mitigated.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:59:y:2023:i:13:p:3928-3939

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DOI: 10.1080/1540496X.2022.2138705

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