China's Foreign Direct Investment In The Study Of Home Country Economic Effect

The rapid rise of China’s outward foreign direct investment (OFDI) is more and more an emerging phenomenon in the whole world, and its three major motives are global market expansion, natural resource procurement and strategic asset seeking. This paper aims to explore home economy effects of China’s OFDI. More specifically speaking, the three causal linkages are theoretically analyzed and empirically examined, which are from market-seeking OFDI to China’s export, from natural resource-seeking OFDI to China’s import of natural resource, and from strategic asset-seeking OFDI to domestic R&D activities and regional gross production. Supportive evidences can be found for the first two home economy effects as the trade effects, as for the last one, although the correlation coefficients are not high, however, Arellano-Bover estimators still confirm that domestic R&D activities and regional GDP greatly benefit from the local aggregate OFDI stock. Therefore, in general, the positive home economy effects are verified in this research.