This study investigates the interdependence between Chinese outward foreign direct investment (OFDI) and high-level visits. Using a simultaneous equation model (SEM) and Three-Stage Least Squares (3SLS), we analyze a panel dataset comprising 146 host countries over the period 2003 to 2021, covering the tenures of Presidents Hu Jintao and Xi Jinping. We further explore how the relationship between OFDI and diplomatic visits differs across developing and developed countries, as well as how shifts in political leadership influence these dynamics. Our empirical findings reveal a robust interdependence between China’s economic actions and diplomatic engagements. Specifically, there is a strong mutual influence between OFDI and visits to developing countries. In contrast, while visits positively impact OFDI in developed countries, there is no reciprocal influence. Moreover, the interdependence between OFDI and visits was particularly evident during President Xi’s tenure, whereas no such relationship was established during President Hu’s tenure. Our findings emphasize the importance of high-level visits in driving OFDI and highlight the critical role of economic engagement in achieving diplomatic goals. Furthermore, by examining this relationship across two presidential tenures, we offer a nuanced perspective on how host country characteristics and leadership transitions shape the dynamics between OFDI and diplomatic visits.

JEL Classification: F21, F23, F59

This research examines the impact of policy-related risk (geopolitical risk, economic uncertainty, and political risk) on export performance. The data we used came from 16 leading economies between 1998 and 2022. We used fixed effect, two-stage least squares (2SLS), and generalized method of moments (GMM) regression analyses to see how different types of policy-related risk affect exports. The results show that geopolitical risk and economic policy uncertainty have a negative impact on export performance, while political stability has a positive effect. We divided the countries into East and West, developing and developed countries, and the results show different efficiency but the same impact on East and West. However, the result of developed and developing countries has a variation in the effect of geopolitical risk on exports; in developed countries, the geopolitical risk has a negative insignificant effect, while in developing countries, it has a significantly negative impact. The study contributes to the literature by providing a regional perspective on the influence of policy-related risks on export performance, offering valuable insights for policymakers and firms seeking to navigate the complexities of global trade amidst uncertainty.

JEL Classification: E60, F10, F14

This paper analyzed how the country’s institutional and political environment affect ESG performance of the companies in the country. An empirical analysis of this study results are as follows. First, the clear difference in financial variables such as the growth rate of foreign direct investment, pension fund assets to GDP ratio, and stock market return rate was found to the significance between advanced economies and emerging markets. Second, in two groups, the institutional indexes, which refer to government policy and the country’s institutional environment such as the rule of law, the government effectiveness, corruption control, and citizens’ voice and accountability showed a positive relationship with ESG performance of the companies. They had a particularly large positive effect on the companies in emerging markets. And third, companies’ synchronization with other companies’ high ESG performance had a positive effect on their ESG performance, and such a tendency was much stronger in the companies of emerging markets. Additionally, institutional dimension had a positive effect on the companies’ synchronization, and such a tendency was much stronger in emerging markets.

JEL Classification: G30, G38, O10