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The Influential Factors on Outward Foreign Direct Investment: Evidence from the “The Belt and Road”

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  • Zhenghui Li
  • Zhehao Huang
  • Hao Dong

Abstract

In this article, we investigate the nonlinear impact on outward foreign direct investment (OFDI) using panel smooth transition regression (PSTR) model with the sample of 12 countries along “The Belt and Road Initiative” in the period of 2010–2015. We find that both overall economic freedom (EF), the interaction of EF and institutional instance, bilateral trade, GDP, and patent significantly influence OFDI. We also demonstrate that EF and economic development exert the inverted “U” effect on OFDI in the different regime. Accordingly, policies specifically designed to increase development of OFDI should be required to address the negative effects considering the differences of EF and economic development.

Suggested Citation

  • Zhenghui Li & Zhehao Huang & Hao Dong, 2019. "The Influential Factors on Outward Foreign Direct Investment: Evidence from the “The Belt and Road”," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(14), pages 3211-3226, November.
    • Handle: RePEc:mes:emfitr:v:55:y:2019:i:14:p:3211-3226
    DOI: 10.1080/1540496X.2019.1569512
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    Cited by:

    1. Qing Xie & Hua Yin, 2023. "Institutional Differences and the Choice of Outward Foreign Direct Investment Mode under the “Belt and Road” Initiative: Experience Analysis Based on China’s Manufacturing Enterprises," Sustainability, MDPI, vol. 15(9), pages 1-26, April.
    2. Tingsong Wang & Jingyi Xu & Yong Jin & Shuaian Wang, 2024. "Assessing the Belt and Road Initiative’s Impact: A Multi-Regression Model Based on Economic Interaction," Sustainability, MDPI, vol. 16(11), pages 1-26, May.
    3. Yue Liu & Pierre Failler & Liming Chen, 2021. "Can Mandatory Disclosure Policies Promote Corporate Environmental Responsibility?—Quasi-Natural Experimental Research on China," IJERPH, MDPI, vol. 18(11), pages 1-19, June.
    4. Qian, Xinbei & Huang, Liangxiong & Wang, Xianbin & Wang, Shuqi, 2022. "Detecting pivotal countries of China's OFDI in the “Belt and Road” initiative: The perspective of similarity of doing business," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 296-311.
    5. Feng, Yusen & Wang, Gang-Jin & Zhu, You & Xie, Chi, 2023. "Systemic risk spillovers and the determinants in the stock markets of the Belt and Road countries," Emerging Markets Review, Elsevier, vol. 55(C).
    6. Zhenghui Li & Yan Wang & Yong Tan & Zimei Huang, 2020. "Does Corporate Financialization Affect Corporate Environmental Responsibility? An Empirical Study of China," Sustainability, MDPI, vol. 12(9), pages 1-19, May.
    7. Yang, Yan & Wang, Yuqian & Qi, Chengzan, 2023. "The guiding effect of economic stimulus plan on corporate investment behavior in heterogeneous institutional environment," Economics Letters, Elsevier, vol. 224(C).
    8. Tinghui Li & Jiehua Ma & Bin Mo, 2021. "Does Environmental Policy Affect Green Total Factor Productivity? Quasi-Natural Experiment Based on China’s Air Pollution Control and Prevention Action Plan," IJERPH, MDPI, vol. 18(15), pages 1-23, August.
    9. Schulhof, Vera & van Vuuren, Detlef & Kirchherr, Julian, 2022. "The Belt and Road Initiative (BRI): What Will it Look Like in the Future?," Technological Forecasting and Social Change, Elsevier, vol. 175(C).

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