Journal
ENERGY POLICY
Volume 146, Issue -, Pages -Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.enpol.2020.111803
Keywords
China; Outward foreign direct investment; Energy security; Oil import
Funding
- Ministry of Education of Humanities and Social Sciences Project [18YJA790068, 19YJA790125]
- National Natural Science Foundation of China [71828401]
- Beijing Municipal Fund for Building World Class Universities of Renmin University of China
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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.
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