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Does institutional difference affect Chinese outward foreign direct investment? Evidence from fuel and non-fuel natural resources

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  • Syed Hasanat Shah
  • Muhammad Abdul Kamal
  • Hafsa Hasnat
  • Li Jun Jiang

Abstract

This article investigates the impact of institutional difference and natural resource endowment in developing host countries on the location choice of Chinese OFDI. We found that institutional difference between China and host countries insignificantly affect the flow of Chinese OFDI, however, when observed on sectoral levels; Chinese investment is responsive to the institutional difference in non-fuel natural resource rich countries while institutional difference asserts insignificant influence on Chinese OFDI in fuel resource rich countries. This shows that institutions play a role in the location choice of Chinese OFDI but, it depends on the sector and institutional proximity.

Suggested Citation

  • Syed Hasanat Shah & Muhammad Abdul Kamal & Hafsa Hasnat & Li Jun Jiang, 2019. "Does institutional difference affect Chinese outward foreign direct investment? Evidence from fuel and non-fuel natural resources," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 24(4), pages 670-689, October.
    • Handle: RePEc:taf:rjapxx:v:24:y:2019:i:4:p:670-689
    DOI: 10.1080/13547860.2019.1660033
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    Cited by:

    1. Xiaoling Zhang & Decai Tang & Brandon J. Bethel, 2021. "Analyzing the Characteristics and Evolution of Chinese Enterprises’ Outward Forward Direct Investment Host Country Network," Sustainability, MDPI, vol. 13(17), pages 1-19, September.
    2. Yasmeen, Rizwana & Zhaohui, Cui & Hassan Shah, Wasi Ul & Kamal, Muhammad Abdul & Khan, Anwar, 2022. "Exploring the role of biomass energy consumption, ecological footprint through FDI and technological innovation in B&R economies: A simultaneous equation approach," Energy, Elsevier, vol. 244(PA).
    3. Munmi Saikia, 2022. "Good institutions, more FDI? Evidence from Indian firm-level data," International Economics and Economic Policy, Springer, vol. 19(3), pages 411-436, July.
    4. Feihong Zheng & Yue Niu, 2023. "Environmental Decentralization, Resource Endowment and Urban Industrial Transformation and Upgrading: A Comparison of Resource-Based and Non-Resource-Based Cities in China," Sustainability, MDPI, vol. 15(13), pages 1-20, July.
    5. Zhang, Wenyue & Li, Jianan & Sun, Chuanwang, 2022. "The impact of OFDI reverse technology spillovers on China's energy intensity: Analysis of provincial panel data," Energy Economics, Elsevier, vol. 116(C).
    6. Wang, Xiaoying & Anwar, Sajid, 2022. "Institutional distance and China's horizontal outward foreign direct investment," International Review of Economics & Finance, Elsevier, vol. 78(C), pages 1-22.
    7. Syed Hasanat Shah & Waqar Ameer, 2021. "The impact of outbound foreign direct investment on export and private investment: Comparative analysis of emerging and developed countries," Australian Economic Papers, Wiley Blackwell, vol. 60(4), pages 674-692, December.
    8. Remo Metalor Ruba & Germinah E. Chiloane-Tsoka & Thea Van der Westhuizen, 2023. "Moderating Effect of Business Environmental Dynamism in the Innovativeness—Company Performance Relationship of Congolese Manufacturing Companies," Economies, MDPI, vol. 11(7), pages 1-16, July.
    9. Junru Song & Hongcan Zhou & Yanchen Gao & Yongpan Guan, 2022. "Digital Inclusive Finance, Human Capital and Inclusive Green Development—Evidence from China," Sustainability, MDPI, vol. 14(16), pages 1-15, August.
    10. Amar Anwar & Ichiro Iwasaki, 2022. "Institutions and FDI from BRICS countries: a meta-analytic review," Empirical Economics, Springer, vol. 63(1), pages 417-468, July.

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