Influencing factors of China’s direct investment in RCEP countries: evidence from panel quantile regression

Abstract

ABSTRACT This article investigates the influencing factors of China’s outward foreign direct investment (OFDI) in RCEP countries across quantiles. We apply a panel quantile regression to seek the factors that influence China’s OFDI in RCEP countries with the most and least OFDI from China. Our findings are outlined as follows. First, influencing factors of China’s OFDI in RCEP countries have significant heterogeneity across quantiles. More specifically, China’s trade exports (EXP) to RCEP countries have the strongest positive impact on promoting China’s OFDI in RCEP countries, and the strongest positive impact of trade exports on China’s OFDI occurs in RCEP countries with less China’s OFDI. Second, The higher the level of political stability (HP) of RCEP countries with more China’s OFDI, the more China’s OFDI they attract, while in RCEP country with the least China’s OFDI and changes in political stability will not have a significant impact on China’s OFDI. Third, in RCEP countries with less China’s OFDI, a higher level of labour resource endowment (LAB) has a stronger effect on attracting China’s OFDI. Overall, our findings provide policymakers more targeted references for tapping the potential of China’s OFDI in RCEP countries.