Chinese Overseas Foreign Direct Investment and Online Digital Freedom in Developing Countries

Abstract

Although studies have shown China’s growing influence on developing countries’ policies, little empirical work has considered the relationship between Chinese overseas foreign direct investment (FDI) and host countries’ online digital freedom. Considering as many as 112 developing countries from 2003 to 2019, and using a two-stage least squares selection modeling approach, we find an association between Chinese FDI and four types of limits on online digital freedom. Conversely, when we substitute global FDI (excluding Chinese FDI), we obtain different results, suggesting there is something unique about Chinese multinational corporations and online digital freedom. Our research indicates that China and host states’ domestic leaders mutually benefit by restricting online digital freedom.