This study investigates the relationship between outward Foreign Direct Investment (FDI) and the performance of Chinese enterprises. Using firm-level panel data over the period 2008–2014, we introduce a taxonomy of outward FDI that accounts for the decision to invest abroad and the location of foreign affiliates. Through different specifications, we show systematic differences in performance between FDI starters and non-starters two years before and two years after the first investment by the starters. This fact points to the existence of strong ex-ante and ex-post effects of Chinese outward FDI. On one hand, we provide evidence—so far not present in the literature—that the best performing Chinese firms self-select into outward FDI. On the other hand, controlling for endogeneity through propensity score matching (PSM) techniques, we detect significant learning effects from outward FDI to firm-level performance. Interestingly, these effects are heterogeneous with respect to destination, with deeper learning for Chinese enterprises investing in Asia.

Baiardi, D., Gattai, V., Natale, P. (2021). Estimating the Ex-ante and the Ex-post Effects of Chinese Outward FDI. WORLD ECONOMY, 44(12), 3641-3673 [10.1111/twec.13161].

Estimating the Ex-ante and the Ex-post Effects of Chinese Outward FDI

Gattai, V;Natale, P
2021

Abstract

This study investigates the relationship between outward Foreign Direct Investment (FDI) and the performance of Chinese enterprises. Using firm-level panel data over the period 2008–2014, we introduce a taxonomy of outward FDI that accounts for the decision to invest abroad and the location of foreign affiliates. Through different specifications, we show systematic differences in performance between FDI starters and non-starters two years before and two years after the first investment by the starters. This fact points to the existence of strong ex-ante and ex-post effects of Chinese outward FDI. On one hand, we provide evidence—so far not present in the literature—that the best performing Chinese firms self-select into outward FDI. On the other hand, controlling for endogeneity through propensity score matching (PSM) techniques, we detect significant learning effects from outward FDI to firm-level performance. Interestingly, these effects are heterogeneous with respect to destination, with deeper learning for Chinese enterprises investing in Asia.
Articolo in rivista - Articolo scientifico
China; ex-ante effects; ex-post effects; FDI; panel data;
English
2-giu-2021
2021
44
12
3641
3673
none
Baiardi, D., Gattai, V., Natale, P. (2021). Estimating the Ex-ante and the Ex-post Effects of Chinese Outward FDI. WORLD ECONOMY, 44(12), 3641-3673 [10.1111/twec.13161].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/336354
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