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China’s One Belt and One Road Initiative and Outward Chinese Foreign Direct Investment in Europe

Author

Listed:
  • Degong Ma

    (School of Economics, Sichuan University, Chengdu 610065, China)

  • Chun Lei

    (School of Economics, Sichuan University, Chengdu 610065, China)

  • Farid Ullah

    (School of Economics, Sichuan University, Chengdu 610065, China)

  • Raza Ullah

    (Department of Management Sciences, Islamia College Peshawar, Peshawar 25200, Pakistan)

  • Qadar Bakhsh Baloch

    (Institute of Business Studies and Leadership, Abdul Wali Khan University, Mardan 23200, Pakistan)

Abstract

For the last few years, the execution of the Belt and Road Initiative (hereinafter referred to as the BRI) and China’s outward foreign direct investment (hereinafter referred to as OFDI) in Europe have seen a significant upward trend. For our current paper, we collected empirical data pertaining to China’s OFDI and foreign trade (gathered from 21 European countries in the trade gravity market for the period 2003 to 2016) that yielded the following results: (a) China’s OFDI to Europe has significantly promoted international trade between China and European countries. On the other hand, OFDI has equally promoted China’s exports to European counties, while it has not encouraged China’s imports from European counties. (b) The Belt and Road Initiative has had a positive impact on China’s exports to European counties and has had a negative impact on China’s imports from European counties. (c) There have been both complementary trade impacts and substitution trade impacts when China has directly invested in European countries, but the complementary impact was much stronger than its substitution impact in the chosen sample period.

Suggested Citation

  • Degong Ma & Chun Lei & Farid Ullah & Raza Ullah & Qadar Bakhsh Baloch, 2019. "China’s One Belt and One Road Initiative and Outward Chinese Foreign Direct Investment in Europe," Sustainability, MDPI, vol. 11(24), pages 1-13, December.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:24:p:7055-:d:296152
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    2. Xueqing Kang & Farman Ullah Khan & Raza Ullah & Muhammad Arif & Shams Ur Rehman & Farid Ullah, 2021. "Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries," Energies, MDPI, vol. 14(12), pages 1-15, June.
    3. Engidaw Sisay Negash & Wenjie Zhu & Yangyang Lu & Zhikai Wang, 2020. "Does Chinese Inward Foreign Direct Investment Improve the Productivity of Domestic Firms? Horizontal Linkages and Absorptive Capacities: Firm-Level Evidence from Ethiopia," Sustainability, MDPI, vol. 12(7), pages 1-23, April.
    4. Degong, Prof. Ma & Ullah, Farid & Ullah, Raza & Arif, Muhammad, 2023. "An empirical nexus between exchange rate and China's outward foreign direct investment: Implications for Pakistan under the China Pakistan economic corridor project," The Quarterly Review of Economics and Finance, Elsevier, vol. 87(C), pages 224-234.
    5. Yang, Yiwen & Lin, Chinho, 2021. "Impact of the “Belt and Road Initiative” on machinery production networks," Economic Modelling, Elsevier, vol. 104(C).

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