[academic salon] issue 16: threshold effect of China's ofdi risk preference -- empirical analysis based on investment gravity model

Time: 15:00, November 21, 2018 (Wednesday)

Location: B401 Newhuadu Business School

Sharing guest: professor Wu Xiangyou

Topic: threshold effect of China's ofdi risk preference: empirical analysis based on investment gravity model

Abstract: Based on the investment gravity model, the panel threshold model revealing China's OFDI risk preference was constructed by utilizing OFDI flow data of 134 host countries from 2007 to 2015. The empirical results show that China's OFDI has the characteristics of risk preference, and China's OFDI inflow decreases with the decrease of the host country's risk level. Both the economic development level and resource richness of the host country have a non-linear impact on China's OFDI, but only the economic development level has a threshold effect on China's OFDI risk preference. After the host country's economic development level crosses the threshold, China's OFDI inflow will accelerate to decline with the decrease of its risk level. China's OFDI can restrain China's export to the host country and promote its export to China. There is a tendency to flow too much to highly indebted countries, but there is no "excessive use of Chinese workers" characteristic. The influence of host country's economic development level on China's OFDI decision-making should be correctly evaluated to overcome the barriers to entry set up by developed economies and guide China's OFDI to flow to high-development economies. Do a good job in risk control of China's OFDI in economies with high resource export dependence but not high resource richness; We should rely more on empirical evidence to resolve international misunderstandings about some of China's OFDI trends and features.