The effect of Confucius Institutes on Chinese outward foreign direct investment: A province-level analysis

2021 ◽  
pp. 1-13
Author(s):  
Wenzhong Ye ◽  
Yuxi Liu ◽  
Haigang Zhou
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Outward Foreign Direct Investment ◽  
Confucius Institutes ◽  
Province Level ◽  
Level Analysis

scholarly journals The Role of Institutional Linkages and Regional Institutions in the Location Choice of Outward Foreign Direct Investment: Empirical Evidence from Chinese Firms

2022 ◽  
Vol 9 (1) ◽  
pp. 10-26
Author(s):  
Juan Li ◽  
Yi Qu ◽  
Dayu Wang ◽  
Nan Zheng
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Location Choice ◽  
Strong Impact ◽  
Outward Foreign Direct Investment ◽  
Chinese Firms ◽  
Regional Institutions ◽  
Confucius Institutes ◽  
Institutional Linkages

Differently from the prior studies that look at the determinants of Outward foreign direct investment (OFDI) location choice, based on the institution theory and employing a comprehensive and unique micro-level dataset of Chinese firms, this study is the first to integrate institutional linkages (Confucius Institute) and regional institutions into one framework and looks at the role of the location choices of Chinese OFDI. The results show that Chinese firms prefer to invest in countries with the presence and higher number of Confucius Institutes including Confucius classrooms. Moreover, the institutional linkage of Confucius Institutes can alleviate the possible negative effects caused by the distance between China and the host country, which suggests Confucius Institutes help Chinese firms against liabilities of foreignness and risks and costs of operation in more distant host countries. We also find that the availability and quality of China’s regional institutions have a strong impact on local firms’ willingness and capability of participating.

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