The impact of Asian Infrastructure Investment Bank on OFDI: evidence from China

This study empirically explores the impact of the Asian Infrastructure Investment Bank (AIIB) on outward foreign direct investment (OFDI). Based on data of Chinese cross-border investments during 2007-2020 obtained from the Bureau van Dijk (BvD) Zephyr database, we use a multi-period difference-in-differences estimation strategy to identify the construction of the AIIB throughout the period of 2014-2020. The results reveal that the establishment of the AIIB increases the possibility of China's OFDI by an average of 15.45%; furthermore, the number of China's OFDI projects arises by 20.40% and the amount of China's OFDI flows boosts by 23.04% on average. Moreover, the heterogeneity analyses show that the AIIB prompts more OFDI flows to countries with higher economic developments, especially those technology- and export-oriented ones.