Abstract: Based on Institutional Theory and Behavioral Science, this paper introduced “corruption distance” as the characterization of difference in the corruption level between China and host countries, and used the panel data of China’s OFDI to 168 countries from 2003 to 2011 and the method of Heckman models to conduct an empirical research on the influence of corruption distance between China and host countries on China’s OFDI. The results showed that corruption distance did not significantly affect whether China conducted OFDI in host countries, but had significantly positive influence on the scale of China’s OFDI; what’s more, after distinguishing the direction of corruption distance, the conclusion remained valid. After distinguishing the different motives of OFDI, we found that corruption distance had significantly positive influence on the resource seeking OFDI and strategic asset seeking OFDI. To further differentiate geographic distribution and time differences of host countries, we found that Chinese enterprises tended to have more stock of OFDI in other countries with larger corruption distance than that in Europe; especially after the global financial crisis in 2008, the Chinese enterprises had more stock of OFDI in countries with larger corruption distance.
Keywords: Outward Foreign Direct Investment(OFDI), Corruption Distance, Institutional Theory, Behavioral Science
source:Finance & Trade Economics ,No4,2014