The impact of country risk on OFDI: empirical analysis based on cross-border panel data

Ziwang Chen, Juan Yang, Wenqing Wang and Yuwei Liu

Applied Economics Letters, 2025, vol. 32, issue 2, 151-156

Abstract: Based on the cross-border panel data of China’s outward foreign direct investment (OFDI) from 2011 to 2018, the fixed-effect model (FE) and two-stage least squares (2SLS) are applied in this article for the influence study of country risk on OFDI and the risk mitigation of export credit insurance. It is found that there is a certain negative impact on China’s OFDI from country risks of the host country. From the perspective of insurance and risk management, export credit insurance plays a certain role in risk avoidance for China’s outward foreign investment enterprises. Overseas enterprises can take options from export credit insurance to avoid risks.

Date: 2025
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DOI: 10.1080/13504851.2023.2184460

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