How political incentives affect Chinese outward foreign direct investment: A UN Security Council membership perspective

Abstract

The UN Security Council has made great contributions to global peace and security over the past 70 years. The five permanent members and ten non‐permanent members of the council share the responsibility by voting for the Security Council resolutions together. In this paper, we study whether Chinese outward foreign direct investment (OFDI) has been influenced by political incentives from perspective of the UN Security Council. Using China's Global Investment Data from 2005 to 2015 provided by the Heritage Foundation, we find that a country attracts more Chinese OFDI when it rotates onto the council. Such an effect increases during the important years when member's votes should be more valuable and among the countries which do not have close cooperation with China.

China's anti‐corruption campaign and outward foreign direct investment by state‐owned enterprises

“…However, explorations of the connections between political factors and SOE's OFDI behaviour is still rare in the literature (Deng et al, 2018; Du & Zhang, 2018; Ma & Teng, 2018). In emerging markets, firms may be affected by political connections in various ways, such as by equity shareholdings or managerial ties (Inoue et al, 2013; Liang et al, 2015; Sun et al, 2015).…”