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This research explores how productivity and state ownership affect outward foreign direct investment in Chinese firms.

How Do Productivity and State Ownership Affect Firms’ OFDI? Evidence from China

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This analysis examines how productivity and state ownership influence OFDI in Chinese firms, suggesting productivity drives investment.

This research explores how productivity and state ownership affect outward foreign direct investment in Chinese firms.
Analyzed data from Chinese listed firms between 2005 and 2022.
Assessed the relationships between productivity, state ownership, and OFDI across various sectors and regions.
Considered factors like sunk costs and international experience in subsidiary investments.
Productivity significantly enhances OFDI, particularly in high-sunk-cost industries and specific regions.
State ownership generally hinders OFDI, though central state-owned enterprises can counteract this negative effect.
Firms with greater international experience benefit more from productivity in their OFDI efforts.

Yan et al. (2026) studied this question.

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