Influence of overseas ethnic Chinese networks on China’s outward foreign direct investment

Abstract

This study investigates the influence of overseas ethnic Chinese networks on China’s outward foreign direct investment using panel data from 2007 to 2018. The empirical results show that: first, overseas ethnic Chinese networks can promote outward foreign direct investment from China. Second, this influence is achieved through cultural identity. In addition, considering the heterogeneity of the business environment in host countries, we find that this transmission path is clearer in host countries with unhealthy business environments.

KEYWORDS:

• Cultural identity
• outward foreign direct investment
• overseas ethnic Chinese networks

JEL Classifications:

• F41
• F02
• F21

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 World Bank. http://info.worldbank.org/governance/wgi/ (object name WGI; accessed August 1, 2020)

2 Data source website: https://geerthofstede.com/landing-page/

Additional information

Funding

This work was supported by the Fujian Science & Technology Project of China [grant number 2020R0082], the Fujian Zhi-lian-yun Supply Chain Technology and Economy Integration Service Platform from the Fujian Association for Science and Technology, the Fujian-Kenya Silk Road Cloud Joint R&D Center from Fujian Provincial Department of Science and Technology [grant number 2021D021].