Business

The theoretical systems of OFDI location determinants in global north and global south economies

Y. Liu, X. Li, et al.

This research paper delves into the contrasting determinants of Outward Foreign Direct Investment (OFDI) between Global North and South economies. With a focus on how China and the United States differ in their investment strategies, the authors shed light on energy requirements, logistics, and political factors shaping China's OFDI, in contrast to the market-centric approach of the US. This insightful study was conducted by Yanfeng Liu, Xue Li, Xiaonan Zhu, Min-Kyu Lee, and Po-Lin Lai.

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Abstract

This research paper investigates the theoretical systems of Outward Foreign Direct Investment (OFDI) location determinants, focusing on the differences between Global North and Global South economies. Using a Vector Error Correction Model (VECM) and panel data from 172 countries (2005-2019), the study compares China and the United States' OFDI, revealing significant differences. China's OFDI is driven by factors like energy, logistics infrastructure, and political considerations, while the US's OFDI is primarily market-oriented and economically driven. The study contributes by highlighting these differences and offering policy advice for both Global North and South.

Publisher

Humanities and Social Sciences Communications

Published On

Mar 27, 2023

Authors

Yanfeng Liu, Xue Li, Xiaonan Zhu, Min-Kyu Lee, Po-Lin Lai

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