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This study investigates the influence of overseas ethnic Chinese networks on China’s outward foreign direct investment using panel data from 2007 to 2018. The empirical results show that: first, overseas ethnic Chinese networks can promote outward foreign direct investment from China. Second, this influence is achieved through cultural identity. In addition, considering the heterogeneity of the business environment in host countries, we find that this transmission path is clearer in host countries with unhealthy business environments.

Influence of overseas ethnic Chinese networks on China’s outward foreign direct investment