Does foreign aid reduce the country's risk of OFDI? The Chinese experience
Abstract Using a sample of 124 countries assisted by China from 2000 to 2019, this paper examines the impact of foreign aid on outward foreign direct investment (OFDI) and the mitigation mechanism of risk. The research finds that, first, foreign aid can significantly reduce the country risk of recip...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Wiley
2023-06-01
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| Series: | International Studies of Economics |
| Subjects: | |
| Online Access: | https://doi.org/10.1002/ise3.20 |
| _version_ | 1797813817877463040 |
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| author | Haijun Wang Hu Yang Fengya Li Min Zhang |
| author_facet | Haijun Wang Hu Yang Fengya Li Min Zhang |
| author_sort | Haijun Wang |
| collection | DOAJ |
| description | Abstract Using a sample of 124 countries assisted by China from 2000 to 2019, this paper examines the impact of foreign aid on outward foreign direct investment (OFDI) and the mitigation mechanism of risk. The research finds that, first, foreign aid can significantly reduce the country risk of recipient countries, especially political risk and financial risk, and thus play a role in promoting the inflow of OFDI of donor countries, and there is a lagged effect of this role; Second, foreign aid from other countries has a negative impact on China's OFDI to recipient countries, indicating that foreign aid is nonaltruistic and exclusive; Third, the mitigation effect of foreign aid on country risk is achieved through five channels: compensation effect, synergistic effect, pioneer effect, assimilation effect, and redistribution effects. |
| first_indexed | 2024-03-13T07:58:19Z |
| format | Article |
| id | doaj.art-9d61b8fee6e54fb3a3f582cad75f6f56 |
| institution | Directory Open Access Journal |
| issn | 2831-3224 |
| language | English |
| last_indexed | 2024-03-13T07:58:19Z |
| publishDate | 2023-06-01 |
| publisher | Wiley |
| record_format | Article |
| series | International Studies of Economics |
| spelling | doaj.art-9d61b8fee6e54fb3a3f582cad75f6f562023-06-02T01:37:29ZengWileyInternational Studies of Economics2831-32242023-06-0118223825810.1002/ise3.20Does foreign aid reduce the country's risk of OFDI? The Chinese experienceHaijun Wang0Hu Yang1Fengya Li2Min Zhang3School of Economics Beijing Wuzi University Beijing ChinaSchool of Information, Shahe Campus Central University of Finance and Economics Beijing ChinaSchool of Information, Shahe Campus Central University of Finance and Economics Beijing ChinaSchool of Information, Shahe Campus Central University of Finance and Economics Beijing ChinaAbstract Using a sample of 124 countries assisted by China from 2000 to 2019, this paper examines the impact of foreign aid on outward foreign direct investment (OFDI) and the mitigation mechanism of risk. The research finds that, first, foreign aid can significantly reduce the country risk of recipient countries, especially political risk and financial risk, and thus play a role in promoting the inflow of OFDI of donor countries, and there is a lagged effect of this role; Second, foreign aid from other countries has a negative impact on China's OFDI to recipient countries, indicating that foreign aid is nonaltruistic and exclusive; Third, the mitigation effect of foreign aid on country risk is achieved through five channels: compensation effect, synergistic effect, pioneer effect, assimilation effect, and redistribution effects.https://doi.org/10.1002/ise3.20foreign aidhomogeneity risk mitigationOFDIrisk mitigation |
| spellingShingle | Haijun Wang Hu Yang Fengya Li Min Zhang Does foreign aid reduce the country's risk of OFDI? The Chinese experience International Studies of Economics foreign aid homogeneity risk mitigation OFDI risk mitigation |
| title | Does foreign aid reduce the country's risk of OFDI? The Chinese experience |
| title_full | Does foreign aid reduce the country's risk of OFDI? The Chinese experience |
| title_fullStr | Does foreign aid reduce the country's risk of OFDI? The Chinese experience |
| title_full_unstemmed | Does foreign aid reduce the country's risk of OFDI? The Chinese experience |
| title_short | Does foreign aid reduce the country's risk of OFDI? The Chinese experience |
| title_sort | does foreign aid reduce the country s risk of ofdi the chinese experience |
| topic | foreign aid homogeneity risk mitigation OFDI risk mitigation |
| url | https://doi.org/10.1002/ise3.20 |
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