A Study On The Influence Of IFDI On OFDI Based On Institutional Quality Perspective

With the deepening of economic globalization and international cooperation,all countries in the world have witnessed rapid growth in the use of inward foreign direct investment(IFDI)and outward foreign direct investment(OFDI).Most of the previous studies analyzed IFDI and OFDI separately,and these studies did not take into account the close relationship between IFDI and OFDI when a country is both a host country and a home country of FDI.However,through analyzing different countries' IFDI and OFDI,this paper finds that IFDI and OFDI in one country have synchronous development trend.Considering the importance of this relationship,this paper uses the countries that has a dual identity of the host country and home country as research object to analyze IFDI's influence on OFDI theoretically.At the same time,the institutional mechanism between IFDI and OFDI is constructed and the corresponding hypothesis is put forward.Then,through the extension of IDP model,this paper makes empirical research of the influence of IFDI on OFDI,using the transnational panel data of 59 countries from 2002 to 2016.The result shows: the use of foreign capital can significantly promote outward investment activities,and the promoting effect is closely related to the country's institutional quality.Institutional quality has significant backward effect on the promoting effect of IFDI.The improvement of institutional quality weakens IFDI's promoting effect on OFDI.Meanwhile,because the developed countries and developing countries are very different in the institutional environment and FDI scales,this paper divides the samples into two groups and do empirical test respectively.The results showed that improvement of the institutional can promote the OFDI in developing countries,while developed countries' OFDI is escape response to home country's institution.In addition,the quality of institution has different intermediate and regulating effects in different countries.The reverse regulation is more significant in developing countries and is not obvious in developed countries.