JOURNAL OF NATURAL RESOURCES ›› 2020, Vol. 35 ›› Issue (11): 2724-2743.doi: 10.31497/zrzyxb.20201113

• Energy Economics and Environment • Previous Articles     Next Articles

Does foreign aid boost energy outward foreign direct investment? Micro-evidence from Chinese firms

HUANG You-xing1(), LI Heng-cheng1, YANG Yu2,3,4()   

  1. 1. School of Economics, Ocean University of China, Qingdao 266100, Shandong, China
    2. Key Laboratory of Regional Sustainable Development Modeling/Institute of Geographic Science and Natural Resources Research, CAS, Beijing 100101, China
    3. College of Resources and Environment, University of Chinese Academy of Sciences, Beijing 100049, China
    4. Institute of Strategy Research of Guangdong-Hong Kong-Macao Greater Bay Area, Guangzhou 510070, China
  • Received:2020-01-15 Revised:2020-06-01 Online:2020-11-28 Published:2021-01-28
  • Contact: Yu YANG;


Using a linked micro-level panel dataset, this paper formally investigates whether Chinese foreign aid stimulates the decisions of energy outward foreign direct investment (OFDI) conducted by Chinese firms. Results show strong evidence that Chinese aid significantly increases the probability of Chinese firms' decisions on energy OFDI in host countries, and the short-term effects are stronger than the accumulative effects. These results are robust with different model specifications. Furthermore, the promoting effects of Chinese foreign aid vary substantially with heterogeneous factors. Specifically, complex and advanced aid forms such as technical aid and export credit, aid for economic infrastructure, energy industry development, and host government finance, as well as the assistance to countries along the Belt and Road, significantly strengthen the promoting effects. This paper provides direct micro-evidence for the promoting effects of Chinese foreign aid on firms' energy OFDI, and also gives policy implications on the aid-driven strategy for stimulating energy OFDI.

Key words: energy, outward foreign direct investment, foreign aid, firm behavior