TITLE:
The Impact of Corruption on Chinese OFDI—Based on the Binary Marginal Perspective
AUTHORS:
Yongpei Wu
KEYWORDS:
OFDI, Corruption, GMM, Binary Marginal
JOURNAL NAME:
Modern Economy,
Vol.10 No.7,
July
12,
2019
ABSTRACT: This paper uses the China Global Investment Tracker
database to map the investment panels of 31 countries along the “Belt and Road”
in China, using the system GMM (generalised method of moments) estimation
method to study the impact of host country corruption on Chinese OFDI (outward
foreign direct investment). The conclusion is that the level of corruption in
the host country and the Chinese OFDI total scale show a non-linear “U”
relationship. From the perspective of intensive margin, the relationship
between host country corruption and the average amount foreign investment from
Chinese enterprises is not significant. From the perspective of extensive
margin, corruption and the number of enterprises setting up factories in the
host country also show U-shaped relationship, but the relationship with the
number of investment industries is not significant.