Dr. FengSong recently had a paper published in the Energy Policy.The paper titled‘Has Chinese outward foreign direct investment in energy enhanced China’s energy security?’, was coauthored with Yong Zhao from School of Economics, Renmin University of China, China and Xunpeng Shi from Australia-China Relations Institute, University of Technology Sydney, Australia.

Abstract

China’s soaring outward foreign direct investment (OFDI) in the energy sector has attracted increasing attention, which is arguably intended to enhance China’s energy security given its large oil deficit. This study attempts to empirically examine whether OFDI in the energy sector can help to enhance China’s energy security by conducting an econometric analysis using a micro-level dataset. The results show that China’s OFDI in energy does enhance its energy security by increasing the volume of oil imports from host countries for the investment and by diversifying China’s sources of imports. On average, a 1% increase in energy OFDI to a country leads to a 1.2% increase in the probability of importing from that country and a 0.071% increase in the firm-level import volume. In addition, we find that the effects do not differ by investment mode (i.e. mergers and acquisitions or greenfield investments) but do differ by country type, as investments in developing countries can positively contribute to oil imports, whereas investments in developed countries do not have the same effect.

Other information

Publication Date:2020

Journal:Energy Policy

Journal Issue: 146（2020）

DOI:https://doi.org/10.1016/j.enpol.2020.111803

The paper can be accessed here