IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v12y2024i9p228-d1465952.html
   My bibliography  Save this article

Does Industrial Structure Upgrading Promote China’s Outward Foreign Direct Investment (OFDI) in ASEAN Countries? Evidence from Provincial Panels

Author

Listed:
  • Ai Li

    (School of Business, Southwest University, Chongqing 402460, China)

  • Jinjing Zhao

    (School of Business, Southwest University, Chongqing 402460, China)

  • Zhenqing Su

    (The Graduate School of Global Business, Kyonggi University, Suwon 16227, Republic of Korea)

  • Miao Su

    (The Graduate School of Technology Management, Kyung Hee University, Yongin 17104, Republic of Korea)

Abstract

Numerous studies have explored the impact of Outward Foreign Direct Investment (OFDI) on upgrading industrial structures in home countries. However, a notable gap exists in the literature regarding the reverse relationship. Based on the cross-border greenfield investment data of Chinese provinces in Association of Southeast Asian Nations (ASEAN) countries from 2003 to 2021, this study employed the Ordinary Least Squares (OLS) model to evaluate the impact of industrial upgrading in each province on OFDI to address this gap. The findings suggest that China’s industrial structure upgrading significantly promotes OFDI toward ASEAN countries, though the effect varies by region within China and by the income levels of host countries. Regionally, industrial upgrading in eastern China notably stimulates OFDI growth, while the effect is not significant in the central and western regions, reflecting inconsistent evolution of industrial structures in various regions. Regarding host country income levels, the promotion effect of industrial structure upgrading on OFDI is influenced by the economic development level of the host country. Furthermore, we find that R&D intensity acts as a moderator that links industrial structural upgrading to OFDI responses. These findings withstand robustness checks, including tests for endogeneity. Ultimately, this study provides policy insights for strengthening the virtuous cycle between industrial upgrading and OFDI.

Suggested Citation

  • Ai Li & Jinjing Zhao & Zhenqing Su & Miao Su, 2024. "Does Industrial Structure Upgrading Promote China’s Outward Foreign Direct Investment (OFDI) in ASEAN Countries? Evidence from Provincial Panels," Economies, MDPI, vol. 12(9), pages 1-19, August.
    • Handle: RePEc:gam:jecomi:v:12:y:2024:i:9:p:228-:d:1465952
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/12/9/228/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/12/9/228/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Liu, Wei & Zhao, Zhihui & Wen, Zhao & Cheng, Shixiong, 2022. "Environmental regulation and OFDI: Evidence from Chinese listed firms," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 191-208.
    2. Wei Li & Zhichao Zhang, 2012. "International capital flows, the domestic employment and wages," China Finance Review International, Emerald Group Publishing Limited, vol. 2(3), pages 286-310, June.
    3. Tian Zhao, 2022. "Innovation performance convergence: evidence from Chinese listed OFDI companies," Applied Economics Letters, Taylor & Francis Journals, vol. 29(20), pages 1939-1943, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhao, Jinjing & Pan, Jie & Xie, Xiangwei & Su, Miao, 2024. "Green outward foreign direct investment and host country environmental effects: The home country's carbon emission reduction system is crucial," Energy, Elsevier, vol. 290(C).
    2. Fang Chen & Wenya Sun, 2023. "How Does Carbon Emissions Efficiency Affect OFDI? Evidence from Chinese Listed Companies," Sustainability, MDPI, vol. 15(17), pages 1-14, September.
    3. Yang, Zhenbing & Zhao, Ziyi & Shao, Shuai & Yang, Lili, 2023. "Carbon regulation and enterprise investment: Evidence from China," Energy Economics, Elsevier, vol. 128(C).
    4. Xu, Jian & Sheng, Yan, 2023. "Regulations, politics, and firm green innovation," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 13-32.
    5. Ma, Guangcheng & Qin, Jiahong & Zhang, Yumeng, 2023. "Does the carbon emissions trading system reduce carbon emissions by promoting two-way FDI in developing countries? Evidence from Chinese listed companies and cities," Energy Economics, Elsevier, vol. 120(C).
    6. Ke Xu & Rui Zhang & Yun Tong, 2024. "The Impact of High-Standard Scenic Areas Construction on County-Level Carbon Emissions and Its Spatial Spillover Effects: Evidence from a Quasi-Natural Experiment," Land, MDPI, vol. 13(11), pages 1-19, November.
    7. Qian Zhao & Chi-Wei Su, 2023. "The Nexus Between Air Pollution and Outward Foreign Direct Investment," SAGE Open, , vol. 13(1), pages 21582440221, January.
    8. Lin, Kang & Tian, Kailan & Gao, Xiang & Zhao, Yu & Yang, Cuihong, 2024. "Responses of China's cross-border investors to domestic environmental regulations," Energy Economics, Elsevier, vol. 131(C).
    9. Li, Jianglong & Gao, Jinfeng & Liao, Meiling, 2024. "Operating risk of enterprises when adopting environmental regulation: Evidence from environmental protection law in China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 901-914.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:12:y:2024:i:9:p:228-:d:1465952. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.