Open AccessChina's OFDI and the economic growth: From the perspective of natural resource
Author(s) -
Feng Ling,
Ge Lulan
Publication year - 2022
Publication title -
international studies of economics
Language(s) - English
Resource type - Journals
eISSN - 2831-3224
pISSN - 2831-3232
DOI - 10.1002/ise3.28
Subject(s) - china , foreign direct investment , natural resource , panel data , resource (disambiguation) , investment (military) , business , perspective (graphical) , economics , natural resource economics , international trade , international economics , geography , macroeconomics , computer science , political science , law , archaeology , artificial intelligence , ecology , computer network , biology , politics , econometrics
Using a country‐level panel data set of China's outward foreign direct investment (OFDI) during 2003–2015, we find that China increases its direct investment in an economy endowed with natural resources, which increases the exports of the resources to China. Facilitated by the industry‐level data between 2003 and 2008, we further show that the increase of China's OFDI in the economies abundant in natural resources would boost the output of Chinese industries which use the resources intensively but shrink the industries that are less intensive in the resources. These findings are consistent with the Rybczynski theorem and suggest that China's OFDI increases its domestic supply of natural resources.