THE IMPACT OF HOST COUNTRY DIGITAL ECONOMY DEVELOPMENT ON CHINESE ENTERPRISES’ OFDI: EVIDENCE FROM RCEP MEMBER COUNTRIES

Shanghai Polytechnic University, People's Republic of China
China

Shanghai Polytechnic University, People's Republic of China
China


Abstract

This paper investigates how the digital economy development of RCEP host economies affects Chinese firms’ outward foreign direct investment (OFDI), using micro data of A-share listed firms from 2010 to 2023. We construct a digital economy index via the entropy method, covering digital infrastructure, digital innovation environment, and digital export potential, and employ Probit, moderating effect and instrumental variable models for empirical analysis. The results show that host countries’ digital economy significantly promotes Chinese enterprises’ OFDI, with digital infrastructure and digital export potential as key drivers. The promotion effect is stronger for firms with overseas experience, in developed host economies and technology-intensive industries. Bilateral institutional distance and host innovation capacity positively moderate the linkage. Digital economy can offset institutional barriers and form synergy with innovation. This study provides empirical support for Chinese firms to optimize OFDI layout in the RCEP region.

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