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An explanatory study of bilateral FDI relations: The case of China

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  • Jianhong Zhang

Abstract

A bilateral FDI relationship should include two dimensions, size and intensity. This study explores the factors that contribute to an explanation of both the size and the intensity of bilateral FDI relations, using the case of China. The results suggest that the countries, which are geographically, politically, ethnically, and economically close to China, have a firm intention of investing in China and enjoy a high FDI intensity. The countries with a large market, high productivity and an advanced structure are capable of investing more in China, and they enjoy a higher FDI value than other countries. The two factors, the overseas Chinese and the distance from China, are significant influences on both the size and the intensity of the FDI relationship.

Suggested Citation

  • Jianhong Zhang, 2005. "An explanatory study of bilateral FDI relations: The case of China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 3(2), pages 133-150.
    • Handle: RePEc:taf:jocebs:v:3:y:2005:i:2:p:133-150
    DOI: 10.1080/14765280500120054
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    Cited by:

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    2. Mourao, Paulo Reis, 2018. "What is China seeking from Africa? An analysis of the economic and political determinants of Chinese Outward Foreign Direct Investment based on Stochastic Frontier Models," China Economic Review, Elsevier, vol. 48(C), pages 258-268.
    3. Chen, Yang & Chao, Yiying & Liu, Wei & Tao, Kan & Lian, Peng, 2021. "Make friends, not money: How Chinese enterprises select transport infrastructure investment locations along the Belt and Road," Transport Policy, Elsevier, vol. 101(C), pages 119-132.
    4. Kodjo N’Souvi & Chen Sun & Badoubatoba Mathieu DISSANI & Folly Dovénam YOVODEVI, 2021. "Impact of Chinese Foreign Direct Investment on the growth of West African Economic and Monetary Union (WAEMU) countries," Journal of Scientific Reports, IJSAB International, vol. 3(1), pages 9-25.
    5. Bhaumik, Sumon Kumar & Co, Catherine Yap, 2011. "China's economic cooperation related investment: An investigation of its direction and some implications for outward investment," China Economic Review, Elsevier, vol. 22(1), pages 75-87, March.

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    More about this item

    Keywords

    China; FDI; FDI intensity; gravity model; Jel Classifications: F21;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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