Anti-dumping,Trade Connections and Outward Foreign Direct Investment
Anti-dumping increases the trade costs of export enterprises in the investigated country,and has an impact on trade contact methods and participation,affecting the internationalization strategy choices of enterprises.The report to the 20th National Congress of the Communist Party of China(CPC)pointed out that to maintain a diverse and stable international economic pattern and economic and trade relations,reducing the impact of non-tariff barriers on enterprises and maintain their diversified strategies in the international market has become an important topic to be explored.This paper first applies the horizontal foreign direct investment(FDI)theory and the internalization theory to analyze the trade substitution effect and trade creation effect of outward foreign direct investment(OFDI)by enterprises,especially the trade creation effect relying on third countries.Then,by matching multiple databases such as the global anti-dumping database,fDi markets database,zephyr cross-border M&A database,CEPII database,CSMAR listed company database,and customs database,and using the difference-in-differences(DID)with multiple time periods,this paper deeply explores the impact of anti-dumping on Chinese enterprises'OFDI decisions from multiple dimensions such as products,enterprises,and countries.This paper finds that anti-dumping increases the probability of enterprises engaging in OFDI activities.Mechanism analysis shows that the decrease in trade share of products subject to anti-dumping measures is a direct driving force for enterprises to engage in OFDI,while the increase in product concentration alleviates the negative impact of trade shocks,and the improvement of enterprise productivity promotes OFDI.Heterogeneity analysis indicates that companies tend to adopt a cross-border M&A investment model when conducting OFDI.The higher the importance and embeddedness of external markets,the lower the financing constraints,and the larger the market size,geographical distance,and institutional distance of the country initiating anti-dumping investigations,the more motivated enterprises are to use OFDI to cross trade barriers.Additionally,this paper finds that Chinese enterprises'OFDI has a cross-trade barrier effect and a trade creation effect in investing in third countries.The empirical research results show that maintaining a diversified and stable international economic structure and economic and trade relations is crucial for enterprise development.The conclusions of this paper enrich the investment theory of developing countries and provide policy reference for governments and enterprises to resist trade and investment risks.
anti-dumpingtrade connectionsoutward foreign direct investment(OFDI)trade obstructiontrade creation
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