Remedy or Poison: the Impacts of ODI on China’s Exports
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| Title | Remedy or Poison: the Impacts of ODI on China’s Exports
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| Author | Liu Xiaoguang, Gou Qin and Lu Feng |
| Organization | National School of Development, Peking University |
| Email | lxiaoguangccer@gmail.com；twinsgou@gmail.com；fenglu@nsd.pku.edu.cn |
| Key Words | Outward Direct Investment; Export and Import; Multinational Panel Analysis |
| Abstract | During the last decade, both China’s Outward Direct Investment (ODI) and exports have experienced rapid growth, providing a good opportunity to investigate the relationship between ODI and exports. Applying a panel data of China’s ODI and trade to 174 countries during 2003-2012, this paper employs the gravity model to empirically investigate the impacts of China’s ODI on exports. We find that China’s ODI to a host country significantly promotes China’s trade with that country: a 10 percent increase in ODI stock can lead to a 2.14 percent increase of exports, 2.07 percent increase of imports. During 2003-2012, the rapid increase of ODI leads export, import and net export to yearly increase about 638.9 billion, 523.5 billion, and 115.4 billion RMB, respectively. In addition, we find that the host country’s economy scale and infrastructure level also have significant positive impacts on China’s exports, while the distance to China significantly reduces China’s exports. |
| Serial Number | WP672 |
| Time | 2014-08-26 |
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