Advanced Search
MyIDEAS: Login to save this article or follow this journal

Home country macroeconomic factors and outward FDI of China and India

Contents:

Author Info

  • Tolentino, Paz Estrella
Registered author(s):

    Abstract

    The current study examines the relationships between a few home country-specific macroeconomic factors and outward FDI flows of China and India using multiple time-series data from 1982 to 2006, and from 1980 to 2006 respectively. The focus is on the examination of Granger causal relationships through exogeneity analysis as well as the assessment of the short-term dynamic relationships between outward FDI flows and other system variables using vector autoregressive modelling. The research concludes that although China and India share similar inferences about the Granger causal relationships concerning outward FDI flows, the determination of the endogenous structure and dynamics of the multiple time series differ in the two countries.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/pii/S1075425310000189
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 16 (2010)
    Issue (Month): 2 (June)
    Pages: 102-120

    as in new window
    Handle: RePEc:eee:intman:v:16:y:2010:i:2:p:102-120

    Contact details of provider:
    Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/description#description

    Order Information:
    Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/bibliographic
    Web: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/bibliographic

    Related research

    Keywords: Outward FDI Home country FDI determinants Chinese MNCs Indian MNCs VAR model;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Ferrantino, Michael J., 1992. "Transaction costs and the expansion of Third-World multinationals," Economics Letters, Elsevier, vol. 38(4), pages 451-456, April.
    2. Nachum, L. & Rolle, J. D., 1999. "Home country and firm-specific ownership advantages: A study of US, UK and French advertising agencies," International Business Review, Elsevier, vol. 8(5-6), pages 633-660, October.
    3. Song Zan Chiou Wei & Zhen Zhu, 2007. "A revisit to the outward FDI determinants: further evidence from count panel data models with fixed effects," Applied Economics Letters, Taylor & Francis Journals, vol. 14(11), pages 809-812.
    4. Rui, Huaichuan & Yip, George S., 2008. "Foreign acquisitions by Chinese firms: A strategic intent perspective," Journal of World Business, Elsevier, vol. 43(2), pages 213-226, March.
    5. Chakrabarti, Avik, 2001. "The Determinants of Foreign Direct Investment: Sensitivity Analyses of Cross-Country Regressions," Kyklos, Wiley Blackwell, vol. 54(1), pages 89-113.
    6. Hawawini, Gabriel & Subramanian, Venkat & Verdin, Paul, 2004. "The home country in the age of globalization: how much does it matter for firm performance?," Journal of World Business, Elsevier, vol. 39(2), pages 121-135, May.
    7. Joshua Aizenman & Ilan Noy, 2005. "FDI and Trade - Two Way Linkages?," Economics Study Area Working Papers, East-West Center, Economics Study Area 76, East-West Center, Economics Study Area.
    8. Blonigen, Bruce A., 2001. "In search of substitution between foreign production and exports," Journal of International Economics, Elsevier, vol. 53(1), pages 81-104, February.
    9. Garg, Miti & Delios, Andrew, 2007. "Survival of the foreign subsidiaries of TMNCs: The influence of business group affiliation," Journal of International Management, Elsevier, Elsevier, vol. 13(3), pages 278-295, September.
    10. Low Sui Pheng & Jiang Hongbin, 2006. "Analysing ownership, locational and internalization advantages of Chinese construction MNCs using rough sets analysis," Construction Management and Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 24(11), pages 1149-1165.
    11. Culem, Claudy G., 1988. "The locational determinants of direct investments among industrialized countries," European Economic Review, Elsevier, vol. 32(4), pages 885-904, April.
    12. Qin, Jie, 2000. "Exchange Rate Risk and Two-Way Foreign Direct Investment," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 5(3), pages 221-31, July.
    13. Hung-Gay Fung & Qingfeng Wilson Liu & Erin H. C. Kao, 2007. "China's Outward Direct and Portfolio Investments," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 15(6), pages 53-68.
    14. Yadong Luo & Rosalie L Tung, 2007. "International expansion of emerging market enterprises: A springboard perspective," Journal of International Business Studies, Palgrave Macmillan, vol. 38(4), pages 481-498, July.
    15. Russ, Katheryn Niles, 2007. "The endogeneity of the exchange rate as a determinant of FDI: A model of entry and multinational firms," Journal of International Economics, Elsevier, vol. 71(2), pages 344-372, April.
    16. Jaya Prakash Pradhan, 2004. "The determinants of outward foreign direct investment: a firm-level analysis of Indian manufacturing," Oxford Development Studies, Taylor & Francis Journals, vol. 32(4), pages 619-639.
    17. Schmitz, Andrew & Bieri, Jurg, 1972. "EEC tariffs and U.S. direct investment," European Economic Review, Elsevier, vol. 3(3), pages 259-270, November.
    18. Hong, Sunghoon & Kim, Sangho, 2003. "Locational Determinants of Korean Manufacturing Investments in the European Union," Hitotsubashi Journal of Economics, Hitotsubashi University, Hitotsubashi University, vol. 44(1), pages 91-103, June.
    19. Deng, Ping, 2004. "Outward investment by Chinese MNCs: Motivations and implications," Business Horizons, Elsevier, vol. 47(3), pages 8-16.
    20. Pantelis Pantelidis & Dimitrios Kyrkilis, 2005. "A cross country analysis of outward foreign direct investment patterns," International Journal of Social Economics, Emerald Group Publishing, vol. 32(6), pages 510-519, June.
    21. Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, Econometric Society, vol. 58(1), pages 113-44, January.
    22. Liu, Hong & Li, Kequan, 2002. "Strategic Implications of Emerging Chinese Multinationals:: The Haier Case Study," European Management Journal, Elsevier, Elsevier, vol. 20(6), pages 699-706, December.
    23. Irving B. Kravis & Robert E. Lipsey, 1980. "The Location of Overseas Production and Production for Export by U.S. Multinational Firms," NBER Working Papers 0482, National Bureau of Economic Research, Inc.
    24. Peter J Buckley & L Jeremy Clegg & Adam R Cross & Xin Liu & Hinrich Voss & Ping Zheng, 2007. "The determinants of Chinese outward foreign direct investment," Journal of International Business Studies, Palgrave Macmillan, vol. 38(4), pages 499-518, July.
    25. Ghosh Indradeep, 2007. "The Relation between Trade and FDI in Developing Countries -- A Panel Data Approach," Global Economy Journal, De Gruyter, De Gruyter, vol. 7(3), pages 1-32, October.
    26. Cushman, David O, 1985. "Real Exchange Rate Risk, Expectations, and the Level of Direct Investment," The Review of Economics and Statistics, MIT Press, vol. 67(2), pages 297-308, May.
    27. Barrell, Ray & Pain, Nigel, 1996. "An Econometric Analysis of U.S. Foreign Direct Investment," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 200-207, May.
    28. Li, Peter Ping, 2007. "Toward an integrated theory of multinational evolution: The evidence of Chinese multinational enterprises as latecomers," Journal of International Management, Elsevier, Elsevier, vol. 13(3), pages 296-318, September.
    29. Deepak Nayyar, 2008. "The Internationalization of Firms From India: Investment, Mergers and Acquisitions," Oxford Development Studies, Taylor & Francis Journals, vol. 36(1), pages 111-131.
    30. Pradhan, Jaya Prakash, 2005. "Outward Foreign Direct Investment from India: Recent Trends and Patterns," MPRA Paper 12358, University Library of Munich, Germany.
    31. Jie Q. Guo & Pravin K. Trivedi, 2002. "Firm-Specific Assets and the Link between Exchange Rates and Japanese Foreign Direct Investment in the United States: A Re-examination," The Japanese Economic Review, Japanese Economic Association, Japanese Economic Association, vol. 53(3), pages 337-349.
    32. Bonaglia, Federico & Goldstein, Andrea & Mathews, John A., 2007. "Accelerated internationalization by emerging markets' multinationals: The case of the white goods sector," Journal of World Business, Elsevier, vol. 42(4), pages 369-383, December.
    33. Baek, H. Young & Kwok, Chuck C. Y., 2002. "Foreign exchange rates and the corporate choice of foreign entry mode," International Review of Economics & Finance, Elsevier, vol. 11(2), pages 207-227, May.
    34. Barrell, Ray & Pain, Nigel, 1999. "Trade restraints and Japanese direct investment flows," European Economic Review, Elsevier, vol. 43(1), pages 29-45, January.
    35. B Elango & Chinmay Pattnaik, 2007. "Building capabilities for international operations through networks: a study of Indian firms," Journal of International Business Studies, Palgrave Macmillan, vol. 38(4), pages 541-555, July.
    36. Wheeler, David & Mody, Ashoka, 1992. "International investment location decisions : The case of U.S. firms," Journal of International Economics, Elsevier, vol. 33(1-2), pages 57-76, August.
    37. Blonigen, Bruce A, 1997. "Firm-Specific Assets and the Link between Exchange Rates and Foreign Direct Investment," American Economic Review, American Economic Association, vol. 87(3), pages 447-65, June.
    38. Bang Nam Jeon & Sung Sup Rhee, 2008. "The Determinants Of Korea'S Foreign Direct Investment From The United States, 1980-2001: An Empirical Investigation Of Firm-Level Data," Contemporary Economic Policy, Western Economic Association International, vol. 26(1), pages 118-131, 01.
    39. Yang, Jeannie Yih Yun & Groenewold, Nicolaas & Tcha, Moonjoong, 2000. "The Determinants of Foreign Direct Investment in Australia," The Economic Record, The Economic Society of Australia, vol. 76(232), pages 45-54, March.
    40. George J. Georgopoulos, 2008. "Cross-border mergers and acquisitions: does the exchange rate matter? Some evidence for Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 41(2), pages 450-474, May.
    41. Contractor, Farok J. & Kumar, Vikas & Kundu, Sumit K., 2007. "Nature of the relationship between international expansion and performance: The case of emerging market firms," Journal of World Business, Elsevier, vol. 42(4), pages 401-417, December.
    42. Choi, Jongmoo Jay & Jeon, Bang Nam, 2007. "Financial factors in foreign direct investments: A dynamic analysis of international data," Research in International Business and Finance, Elsevier, Elsevier, vol. 21(1), pages 1-18, January.
    43. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, Econometric Society, vol. 48(1), pages 1-48, January.
    44. Daniel Pick & Utpal Vasavada, 1998. "Exchange Rate Effects on the Relationship between FDI and Trade in the U.S. Food Processing Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 80(5), pages 1073-1079.
    45. Jyothi Pantulu & Jessie P.H. Poon, 2003. "Foreign direct investment and international trade: evidence from the US and Japan," Journal of Economic Geography, Oxford University Press, vol. 3(3), pages 241-259, July.
    46. Chittoor, Raveendra & Ray, Sougata, 2007. "Internationalization paths of Indian pharmaceutical firms -- A strategic group analysis," Journal of International Management, Elsevier, Elsevier, vol. 13(3), pages 338-355, September.
    47. Farrell, Roger & Gaston, Noel & Sturm, Jan-Egbert, 2004. "Determinants of Japan's foreign direct investment: An industry and country panel study, 1984-1998," Journal of the Japanese and International Economies, Elsevier, vol. 18(2), pages 161-182, June.
    48. Bolling, H. Christine & Shane, Mathew & Roe, Terry L., 2007. "Exchange Rates and U.S. Foreign Direct Investment in the Global Processed Food Industry," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 36(2), October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Stoian, Carmen, 2013. "Extending Dunning's Investment Development Path: The role of home country institutional determinants in explaining outward foreign direct investment," International Business Review, Elsevier, vol. 22(3), pages 615-637.
    2. Boateng, Agyenim & Hua, Xiuping & Uddin, Moshfique & Du, Min, 2014. "Home country macroeconomic factors on outward cross-border mergers and acquisitions: Evidence from the UK," Research in International Business and Finance, Elsevier, Elsevier, vol. 30(C), pages 202-216.
    3. Uddin, Moshfique & Boateng, Agyenim, 2011. "Explaining the trends in the UK cross-border mergers & acquisitions: An analysis of macro-economic factors," International Business Review, Elsevier, vol. 20(5), pages 547-556, October.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:intman:v:16:y:2010:i:2:p:102-120. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.