The purpose of this paper is to investigate how digital economy development in the Association of Southeast Asian Nations (ASEAN) affects China’s outward foreign direct investment (OFDI) and the underlying mechanisms.
Based on panel data from ASEAN member countries from 2013 to 2021, we set China’s OFDI stocks as the dependent variable, the Global Digital Economy Development Index (TIMG) as the independent variable, and technological innovation, human capital and institutional quality as mediating variables, and conduct empirical analyses.
The results show that digital economy development in ASEAN countries, including the advancement of digital technology, the improvement of digital infrastructure, the expansion of digital market scale, and the enhancement of the digital governance capacity, can significantly promote China’s OFDI in these countries. Furthermore, China’s OFDI is more likely to flow into ASEAN countries with lower economic development levels, and technological innovation, human capital, and institutional quality mediate the relationship between digital economy development and OFDI.
In theory, by incorporating the digital economy into the analytical framework of the factors influencing OFDI, this study expands both the traditional set of economic and geographical elements and the theoretical boundaries of international investment location decisions. In practice, we empirically examine the causal relationship between the digital economy and China’s OFDI decisions and the underlying mechanisms to provide valuable insights that will enhance China’s high-quality OFDI and its economic and trade exchanges with ASEAN countries while promoting the sustainable development of the regional digital economy.
