Outward Direct Investment and Corporate Stock Prices: An Empirical Study Based on Corporate and Project Differences

This paper uses data on Chinese companies’ outbound direct investment（ODI） and stock prices of listed companies on A-share and Hong Kong market from 2006 to 2019 to study the impacts of stock price and operating performance of ODI of Chinese corporations. We finds that, first, in the short term, ODI will bring out a positive stock price response, and the impact in Hong Kong market is stronger and more durable. But it has no significant impact on the actual operating performance of the company. Second, the two markets have different responses to ODI with different ownership attributes. Third, differences in geographic location and income level of target country of ODI have a significant impact on the stock price response. Fourth, the differences in the industry of ODI, the differences of the relation between project industry and the main business of the enterprise significantly affect the stock price response. Fifth, in 2017, the state’s guidance and regulations of OFI also had a significant impact on the stock price response, while the Belt and Road did not show a significant impact. Finally, responses of the two markets to different characteristics of foreign investment are quite different.