Outward Foreign Direct Investment and Total Factor Productivity: Evidence from China's Enterprise Data

This study focuses on the impact of China's outward foreign direct investment on the total factor productivity of companies at a micro level. The data spans from 2005 to 2007 and comes from Chinese manufacturing companies. We use a combination of propensity score matching and Different-in-Diffe...

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Bibliographic Details
Published in:IOP conference series. Earth and environmental science 2018-10, Vol.186 (6), p.12017
Main Authors: Du, Xiaoxue, Jia, Nisha, Lei, Hongzhen, Lan, Juanli
Format: Article
Language:English
Subjects:
Foreign investment
Political factors
Politics
Productivity
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Summary:This study focuses on the impact of China's outward foreign direct investment on the total factor productivity of companies at a micro level. The data spans from 2005 to 2007 and comes from Chinese manufacturing companies. We use a combination of propensity score matching and Different-in-Different method to empirically examine the effect of OFDI on the TFP. The test results show some evidence. First, OFDI increases the TFP of companies. Second, the promotion of TFP is mainly reflected in the non-state-owned enterprises. The state-owned enterprises' after-effect productivity improvement is not significant. Third, the impact of OFDI on TFP varies due to the different political risks in foreign host countries, i.e., countries with low corporate political investment risks are better than countries with high political risks.
ISSN:1755-1307
1755-1315
1755-1315
DOI:10.1088/1755-1315/186/6/012017