Effects of Host-Country Corruption on Chinaâ€™s Outward Foreign Direct Investments: Expert Knowledge Versus Public Awareness
Lin Wang and
SAGE Open, 2022, vol. 12, issue 4, 21582440221141701
Corruption in the host nation is a key issue influencing foreign direct investment. Most existing studies use the expert-knowledge-based corruption index as a proxy for corruption. However, the validity of these published corruption indexes is often questioned by scholars and experts. By introducing Internet data to evaluate public corruption awareness levels, this paper uses two different corruption proxy variables to investigate the relationship between host country corruption and Chinaâ€™s OFDI. In addition, these relationships are further compared between the Belt and Road (B&R) countries and non-B&R countries. The empirical results show that there are negative correlations between host country corruption and Chinaâ€™s OFDI flow for the whole sample, B&R countries and non-B&R countries. The empirical results of this paper serve as a reference for Chinese enterprises to make overseas investment decisions.
Keywords: foreign direct investment; China; public corruption awareness; expert corruption knowledge; B&R countries (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:12:y:2022:i:4:p:21582440221141701
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