China’s outward foreign direct investment and exports diversification: an asymmetric analysis
Journal of Chinese Economic and Foreign Trade Studies
ISSN: 1754-4408
Article publication date: 11 August 2020
Issue publication date: 8 December 2020
Abstract
Purpose
Over the past two decades, China’s outward foreign direct investment (OFDI) has risen remarkably. Whether such an increase affects the Chinese export diversification (ED) is a significant issue that has surprisingly remained unaddressed. This study aims to explain this issue that how OFDI plays a vital role in symmetric and asymmetric effects on its ED.
Design/methodology/approach
The authors introduce a robust nonlinear autoregressive distributed lag (NARDL) model. Ironically, the purpose of this study is to analyze the symmetric and asymmetric effect of OFDI on ED.
Findings
The authors propose that growing OFDI would be more advantageous to China, rather than the policies of contraction. Therefore, the study provides valuable policy insights to consider the long-run asymmetric momentum given to ED by China’s OFDI.
Originality/value
The results of this study may seem to be an important newsletter for further policy discussion on how China can catch up on the benefits of ED through OFDI.
Keywords
Acknowledgements
Disclosure statement: No potential conflict of interest was reported by the authors.
Funding: This research work was supported by the National Social Science Fund of China under Grant number 17JJD790007.
Citation
Rehman, F.U., Ding, Y., Noman, A.A. and Khan, M.A. (2020), "China’s outward foreign direct investment and exports diversification: an asymmetric analysis", Journal of Chinese Economic and Foreign Trade Studies, Vol. 13 No. 2, pp. 45-69. https://doi.org/10.1108/JCEFTS-12-2019-0065
Publisher
:Emerald Publishing Limited
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