Abstract
The present study employs panel data of 29 provinces and municipalities in mainland China from 2003 to 2016 to empirically investigate the influence of international students on China’s outward FDI. The results show that international students in China can significantly promote outward FDI in various Chinese provinces. Moreover, we observe a substitution effect with export scale and wage level, that is, attracting international students can offset the negative impact of insufficient export scale and low wages on regional OFDI (outward foreign direct investment). From a regional perspective, the growth in international students’ inflows in China has a significant positive impact on OFDI of provinces along “the 21st Century Maritime Silk Road”, but has no significant impact on the provinces along “the Silk Road Economic Belt”. The above conclusions not only elaborate the regional distribution mechanism of OFDI in China, but also provide a reference for each province to formulate more favorable policies to attract foreign talent to effectively implement the strategy of “going global”.
Highlights
China has gradually become an important global investor with the implementation of its “Going Global” strategy and “Belt and Road” initiatives
Regression results of model 6 show that for every 1% increase in the number of international students in China, the scale of outward foreign direct investment (OFDI) in various provinces increases by 0.2%
Based on the empirical investigation on panel data of 29 provinces in China from 2003 to 2016, this study reveals that international students in China have a significant positive impact on OFDI of Chinese provinces
Summary
China has gradually become an important global investor with the implementation of its “Going Global” strategy and “Belt and Road” initiatives. In order to enhance global competitiveness and resource allocation capabilities, more and more Chinese enterprises are “going global” and pursuing enterprise development through OFDI. International students in China are very familiar with the overseas markets and have a certain understanding of Chinese culture. They can serve as a link between Chinese enterprises and overseas markets. Their international exposure and strong cross-cultural communication ability can promote China’s OFDI and play a vital role in the “going global” strategy of Chinese enterprises. For China, attracting international students is a new way to strengthen its OFDI
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