Foreign direct investment and economic policy uncertainty in China

Lidan Zhang, Gonul Colak*

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

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 languageEnglish
Peer-reviewed scientific journalEconomic and Political Studies
Volume10
Issue number3
Pages (from-to)279-289
ISSN2095-4816
DOIs
Publication statusPublished - 01.09.2022
MoE publication typeA1 Journal article - refereed

Keywords

  • China
  • economic policy uncertainty (EPU)
  • Foreign direct investment (FDI)
  • political uncertainty

Areas of Strength and Areas of High Potential (AoS and AoHP)

  • AoS: Financial management, accounting, and governance

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