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Financial development and natural resources: The dynamics of China’s outward FDI

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  • Ling Feng
  • Lulan Ge
  • Zhiyuan Li
  • Ching‐Yi Lin

Abstract

This paper studies the dynamics of China's outward FDI (OFDI) by examining the changing roles of host economy financial development and natural resources in the decision of OFDI destination choice. Using a country‐level panel data set of China's OFDI during 2003–2015, we find that Chinese multinationals show a strong and growing incentive of seeking natural resources of host economies, especially after the 2008 financial crisis, regardless of whether the host economy is a developed or developing economy. On the other hand, financial development of host economy is less relevant.

Suggested Citation

  • Ling Feng & Lulan Ge & Zhiyuan Li & Ching‐Yi Lin, 2022. "Financial development and natural resources: The dynamics of China’s outward FDI," The World Economy, Wiley Blackwell, vol. 45(3), pages 739-762, March.
    • Handle: RePEc:bla:worlde:v:45:y:2022:i:3:p:739-762
    DOI: 10.1111/twec.13099
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