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Does technology-seeking OFDI improve the productivity of Chinese firms under the COVID-19 pandemic?

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  • Wong, Zoey
  • Chen, Afei
  • Peng, Dan
  • Kong, Qunxi

Abstract

This paper empirically investigates the impact of technology-seeking outward foreign direct investment (OFDI) on firms' productivity under the influence of negative external shocks, taking as a sample the investment data of Chinese firms before and during COVID-19. The results show that technology-seeking OFDI improves productivity, but not under negative external shocks. The dampening effect of such shocks is more significant when the host country is a developed country and in firms with multiple branches. Technology-seeking OFDI particularly improves the productivity of research and development and processing firms, and (among the productivity measures tested) most prominently affects total factor productivity.

Suggested Citation

  • Wong, Zoey & Chen, Afei & Peng, Dan & Kong, Qunxi, 2022. "Does technology-seeking OFDI improve the productivity of Chinese firms under the COVID-19 pandemic?," Global Finance Journal, Elsevier, vol. 51(C).
    • Handle: RePEc:eee:glofin:v:51:y:2022:i:c:s1044028321000739
    DOI: 10.1016/j.gfj.2021.100675
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    Cited by:

    1. Natália Barbosa, 2022. "Outward FDI, restructuring, performance upgrading and resilience: Firm-level evidence from Portugal," GEE Papers 0168, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Sep 2022.
    2. Tong Sheng & Bingquan Fang & Xiaoqian Lu & Xingheng Shi & Chaohai Shen & Xiaolan Zhou, 2022. "The Relationship between Corporate Social Responsibility, Global Investment, and Equity Incentives," Sustainability, MDPI, vol. 14(23), pages 1-27, December.
    3. Zoey Wong & Afei Chen & Farhad Taghizadeh-Hesary & Rongrong Li & Qunxi Kong, 2023. "Financing Constraints and Firm’s Productivity Under the COVID-19 Epidemic Shock: Evidence of A-Shared Chinese Companies," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 35(1), pages 167-195, February.
    4. Kong, Qunxi & Li, Rongrong & Wang, Ziqi & Peng, Dan, 2022. "Economic policy uncertainty and firm investment decisions: Dilemma or opportunity?," International Review of Financial Analysis, Elsevier, vol. 83(C).
    5. Cai, Xiang & Zhao, Xiaohui & Jiang, Cuiting & Zhang, Liguo, 2024. "China's foreign direct investments: Do they promote domestic green technology?," Journal of Policy Modeling, Elsevier, vol. 46(1), pages 60-74.
    6. Khurram, Muhammad Usman & Abbassi, Wajih & Chen, Yifan & Chen, Lifeng, 2024. "Outward foreign investment performance, digital transformation, and ESG performance: Evidence from China," Global Finance Journal, Elsevier, vol. 60(C).
    7. Kong, Qunxi & Wu, Peipei & Wang, Ziqi, 2024. "Outward foreign direct investment operation modes and reverse technology spillovers: Implications for the quality of economic growth," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 1628-1639.
    8. Wang, Delu & Wang, Yadong & Jiang, Wuding & Shi, Xunpeng, 2023. "Has outward foreign direct investment alleviated industrial overcapacity in China? An empirical test of the upstream and downstream industrial links," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 250-263.
    9. Peng, Dan & Ji, Y. & Kong, Qunxi, 2023. "OFDI and firms' sustainable productive capacity: Evidence from Chinese industrial firms," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 641-652.
    10. Shao, Yanmin & Li, Junlong & Zhang, Xueli, 2024. "Outward foreign direct investment and green technology innovation: A company and host country perspective," Technological Forecasting and Social Change, Elsevier, vol. 203(C).

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    More about this item

    Keywords

    Technology-seeking OFDI; Productivity; COVID-19; External shock; Investment heterogeneity;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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