شبکه های قومی چینی و سرمایه گذاری بین المللی: شواهد از سمت داخل FDI در چین

This paper studies the role of business and social networks in international investment by examining the effects of ethnic Chinese networks on foreign direct investment (FDI) in China. After controlling for a variety of economic determinants of FDI, this study finds a significant positive role in inward FDI of ethnic Chinese networks proxied by the population share of ethnic Chinese in the investing country.

The role of business and social networks in promoting international trade has attracted increasing research interest in recent years. Rauch and Casella (2003), for example, provide a theoretical model in which information-sharing social or ethnic networks can improve the allocation of resources and increase the volume of trade in the international market under incomplete information. On the empirical front, Head, Ries, and Wagner (1997) find that immigrants significantly increase trade between Canada and source countries; Rauch (1999) presents evidence that common language and colonial ties play an important role in international trade, more so in differentiated products than in homogeneous products because search barriers are higher to trade in the former; Rauch and Trindade (2002) show that ethnic Chinese networks increase bilateral trade, again with a larger effect on trade in differential products.

In this paper, I present evidence that FDI in China is positively related to the population share of ethnic Chinese in the source country, and interpret this as showing the significant role of ethnic Chinese networks in FDI in China. This result is robust to a variety of specifications. A 1% point increase in the ethnic Chinese population share leads to a 3.7% or higher increase in cumulative FDI in China, according to the regression results in this paper.