Liu Ziwei | Foreign Investment Security Review and Investment Transfer of Multinational Corporations

December 7th,The "2024 International Trade Disputes and Globalization Restructuring Academic Symposium"Successfully held at Lingnan University in Hong Kong."


Liu Ziwei, Lecturer, Department of International Economics and Trade, Jilin UniversityHe attended the seventh sub-forum, "Foreign Investment Flows," chaired by Lu Bing, Associate Professor of the School of Statistics at Beijing Normal University, and shared his article entitled "Foreign Investment Security Review and Multinational Corporation Investment Transfer."


342A


Liu Ziwei is a lecturer in the Department of International Economics and Trade at Jilin University. Her research areas include world economy, digital economy, and energy economy.


12E48


In her presentation, Liu Ziwei pointed out that this article studies the continuous expansion of China's outward foreign direct investment (OFDI) against the backdrop of deepening global economic integration, but the increasingly stringent foreign investment security reviews by various countries pose challenges to Chinese enterprises' overseas investments. Based on China's OFDI stock data from 2003 to 2020, the article systematically explores the impact of foreign investment security reviews on OFDI and its spatial spillover effects. The study found: First, foreign investment security reviews have a "crowding-out effect" on Chinese OFDI in host countries, but a "crowding-in effect" on neighboring countries. Second, only OFDI with low transfer costs will adjust its location due to reviews, while OFDI with high transfer costs is less affected, indicating a "selective preference" in OFDI. Third, large-scale foreign investment security reviews will prompt Chinese OFDI to adjust its location, but small-scale reviews have limited impact. Fourth, Chinese OFDI not only shifts to geographically closer regions but also to regions with greater institutional proximity, demonstrating a "flow preference." This article provides policy references for optimizing China's OFDI strategic layout and promoting high-level opening up, and has important theoretical and practical significance for global investment liberalization and international economic cooperation.


13F94


   
Wang Yong, Associate Professor at the Institute of New Structural Economics, Peking University, commented on the article. He believes that the article's study of the impact of foreign investment security reviews on China's outward foreign direct investment (OFDI), with particular attention to its spatial spillover effects, has significant practical implications. The article uses Chinese OFDI data from 2003 to 2020, employs a spatial Durbin model (SDM) to analyze the direct and indirect impacts of foreign investment reviews, and conducts robustness tests. The study finds that foreign investment security reviews lead to a "crowding-out effect" in host countries by increasing costs and uncertainty, while simultaneously generating a "crowding-in effect" in neighboring countries, influencing the destination of OFDI. He points out that the article still has room for improvement in its theoretical mechanisms, such as why it emphasizes geographical distance rather than technological or institutional distance, and how to eliminate the impact of other trade policies during the same period. Furthermore, the roles of industry heterogeneity, investment forms (portfolio vs. greenfield), and transfer costs in OFDI deserve further exploration. The empirical section could enhance data robustness testing, such as excluding the Hong Kong sample or introducing third-party databases (AEI, ORBIS M&A), and clarify whether the impact of foreign investment security reviews is intensive or extensive margin. Overall, the paper makes significant contributions, but further refinement of the theoretical analysis and strengthening of the empirical methodology could enhance the robustness of the conclusions and their policy reference value.   


share
WeChat
Sina Weibo
QQ
QQ space
Douban
Baidu Post Bar
国际贸易争端与全球化重构学术研讨会20242024_Trade2024_trade
Prev Qiu Tianze | Research on the Impact of the Uncertainty of the U.S. Trade Policy towards China on the
Next Wang Yong | External Multiplier Effect: Overseas Infrastructure Investment and Industrial Transfer