China's anti‐corruption campaign and outward foreign direct investment by state‐owned enterprises

Abstract This paper explores political factors in the determination of China's State‐Owned Enterprises' (SOEs') outward foreign direct investment (OFDI). We examine China's anti‐corruption campaign as a political intervention into economic decision making. Based on reliable data on China SOEs' OFDI, we find that the anti‐corruption campaign launched by the Chinese Communist Party in 2013 has had a negative influence on the growth of SOEs' OFDI. Further statistical analysis suggests that the negative impact of the anti‐corruption campaign on SOEs' OFDI growth is greater when the anti‐corruption effort is stronger, the SOE more monopolistic, and the institutional quality of the host state greater.