Promoting OFDI Through Policy Synergy: Evidence From China

ABSTRACT Existing research on OFDI in emerging market economies has largely overlooked the effects of policy synergy. This study examines the synergistic impact of the Belt and Road Initiative and green bond policy on firms' OFDI activities from a dual‐policy perspective. The results demonstrate that the synergy between the two policies significantly enhances firms' OFDI. Mechanism analysis reveals that this positive effect operates primarily through alleviating financing constraints, increasing media attention, and improving information transparency. The heterogeneity analysis reveals that policy synergy exerts a stronger promoting effect on non‐SOEs, firms without government‐enterprise connections, and those operating in high‐pollution industries. Additional findings indicate that both policies jointly contribute to stabilizing firms' OFDI in volatile policy environments. In contrast to prior studies focusing on individual policy effects, this study is the first to uncover the interaction mechanism between outward‐looking development policy and green finance policy from a policy synergy perspective. The findings provide novel empirical evidence for how emerging market economies can address dual challenges of environmental and financial constraints in the process of internationalization, offering important theoretical implications for achieving economic openness through the coordinated design of policy instruments.