The impact of administrative simplification on outward foreign direct investment: Evidence from a quasi-natural experiment in China

Xiaobing Huang, Xinxin Meng, Meng Chen and Xiaolian Liu

The Journal of International Trade & Economic Development, 2022, vol. 31, issue 3, 375-393

Abstract: Using firm-level data from China from 2007 and 2014, this study assesses the impact of administrative simplification on the performance of an outward foreign direct investment. Results estimated by the difference-in-difference method indicate that the administrative simplification has a positive impact on OFDI. The delegation of approval authority can promote the growth of firms’ OFDI in China. This result is robust after addressing the concerns of the endogeneity and sample selection bias. Moreover, results of extension studies show that the growth of OFDI contributed by administrative simplification plays a negative role in firms’ export performance. Finally, the policy effect of administrative simplification on OFDI is stronger for non-SOEs than SOEs.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:taf:jitecd:v:31:y:2022:i:3:p:375-393

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DOI: 10.1080/09638199.2021.1981983

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