Chinese firms’ contribution to local poverty alleviation: the role of inward FDI

Xintong Wu () and Longyuan Ma ()
Additional contact information
Xintong Wu: Southwest Petroleum University
Longyuan Ma: University of Chinese Academy of Sciences

Asian Business & Management, 2025, vol. 24, issue 1, No 5, 97-127

Abstract: Abstract Although inward foreign direct investment (FDI) plays a critical role in enabling emerging economies to address poverty—one of the foremost Sustainable Development Goals (SDGs)—its impact on the poverty alleviation investments of domestic firms remains underexplored. This study is situated within the context of China’s poverty alleviation initiatives and focuses on subnational-level inward FDI and its two effects, that is, social demonstration effect and industrial competition effect. Using a panel dataset of 14,428 listed firm-year observations spanning 2016 to 2022, we find that subnational-level inward FDI has an inverted U-shaped effect on domestic firms’ poverty alleviation investment; the effect becomes stepper as foreign-invested firms have high levels of poverty alleviation investment and financial performance. By revealing a nonlinear effect, this study helps reconcile inconsistencies regarding the role of subnational-level inward FDI in poverty alleviation and has important implications for introducing inward FDI in emerging economies.

Keywords: Subnational-level inward FDI; Sustainable development goals; Poverty alleviation investments; Social demonstration; Industrial competition (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41291-025-00292-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:pal:abaman:v:24:y:2025:i:1:d:10.1057_s41291-025-00292-x

Ordering information: This journal article can be ordered from
https://www.palgrave.com/gp/journal/41291

DOI: 10.1057/s41291-025-00292-x

Access Statistics for this article

Asian Business & Management is currently edited by Fabian Jintae Froese

More articles in Asian Business & Management from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().