Foreign direct investment and economic policy uncertainty in China

Lidan Zhang; Gonul Colak

doi:10.1080/20954816.2022.2090096

Foreign direct investment and economic policy uncertainty in China

Lidan Zhang
, Gonul Colak^*

^*Corresponding author for this work

Finance, Helsinki

University of Sussex

Research output: Contribution to journal › Article › Scientific › peer-review

15 Citations (Scopus)

Abstract

The trend of foreign direct investment (FDI) in China has switched from inflow to outflow following the rapid economic growth during the past several decades. Stimulated by government policies, in recent years China’s firms have actively sought overseas investment opportunities. This paper examines the relationship between economic policy uncertainty (EPU) and cross-border capital flow decisions for listed firms in China. Our findings demonstrate that EPU originating from China does not seem to dissuade FDI inflow into China, but it does curtail FDI outflow from the country. It appears that government policies and the uncertainty the policies bring are deterministic for FDI.

Original language	English
Peer-reviewed scientific journal	Economic and Political Studies
Volume	10
Issue number	3
Pages (from-to)	279-289
ISSN	2095-4816
DOIs	https://doi.org/10.1080/20954816.2022.2090096
Publication status	Published - 01.09.2022
MoE publication type	A1 Journal article - refereed

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth
SDG 10 Reduced Inequalities

Keywords

512 Business and Management
China
economic policy uncertainty (EPU)
Foreign direct investment (FDI)
political uncertainty

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FDI and EPU_October_2022Auhor's accepted manuscript (AAM), 372 KB

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title = "Foreign direct investment and economic policy uncertainty in China",

abstract = "The trend of foreign direct investment (FDI) in China has switched from inflow to outflow following the rapid economic growth during the past several decades. Stimulated by government policies, in recent years China{\textquoteright}s firms have actively sought overseas investment opportunities. This paper examines the relationship between economic policy uncertainty (EPU) and cross-border capital flow decisions for listed firms in China. Our findings demonstrate that EPU originating from China does not seem to dissuade FDI inflow into China, but it does curtail FDI outflow from the country. It appears that government policies and the uncertainty the policies bring are deterministic for FDI.",

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AU - Colak, Gonul

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AB - The trend of foreign direct investment (FDI) in China has switched from inflow to outflow following the rapid economic growth during the past several decades. Stimulated by government policies, in recent years China’s firms have actively sought overseas investment opportunities. This paper examines the relationship between economic policy uncertainty (EPU) and cross-border capital flow decisions for listed firms in China. Our findings demonstrate that EPU originating from China does not seem to dissuade FDI inflow into China, but it does curtail FDI outflow from the country. It appears that government policies and the uncertainty the policies bring are deterministic for FDI.

KW - 512 Business and Management

KW - China

KW - economic policy uncertainty (EPU)

KW - Foreign direct investment (FDI)

KW - political uncertainty

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SP - 279

EP - 289

JO - Economic and Political Studies

JF - Economic and Political Studies

IS - 3

ER -

Foreign direct investment and economic policy uncertainty in China

Abstract

UN SDGs

Keywords

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