The Effect of Political Risk on China Firms' Going Abroad——An Empirical Study Based on A Panel Data Model

Theoretically,political risk(PR) in the host countries can exert negative effect on the inflow of foreign direct investment,but the empirical results differ from each other.After 2000,China's nonfinancial outflow of foreign direct invest ment(OFDI) boomed when the PR events tend to rise accordingly.This paper uses the data of China's OFDI in 73 countries to make a panel data model and concludes that PR of the host economy has no obvious influence on the inflow of China's OFDI. The conclusions of the paper have important theoretic and practical implication to China's going abroad.