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Unravelling the complex motivations behind China's outward FDI

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  • Yi Zhang
  • Hein Roelfsema

Abstract

This study empirically investigates the dynamics of motivations behind China's outward foreign direct investment (FDI). Based on a dataset of 75 host countries of China's outward FDI, we test the relative importance of outward FDI motives in different time periods. We account for endogeneity issues due to unobserved host country-specific factors and reverse causality using a dynamic panel estimation approach. We find that over time increasing foreign market commitment, exploiting global network linkages, and the seeking of external resources (natural resources and strategic assets) have become more important in driving outward FDI from China.

Suggested Citation

  • Yi Zhang & Hein Roelfsema, 2014. "Unravelling the complex motivations behind China's outward FDI," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 19(1), pages 89-100, January.
    • Handle: RePEc:taf:rjapxx:v:19:y:2014:i:1:p:89-100
    DOI: 10.1080/13547860.2013.803843
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    1. World Bank, 2009. "World Development Indicators 2009," World Bank Publications - Books, The World Bank Group, number 4367, December.
    2. Louis T. Wells, 1983. "Third World Multinationals: The Rise of Foreign Investments from Developing Countries," MIT Press Books, The MIT Press, edition 1, volume 1, number 026273169x, December.
    3. Mathews, John A., 2002. "Dragon Multinational: A New Model for Global Growth," OUP Catalogue, Oxford University Press, number 9780195121469.
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    Cited by:

    1. Mina, Wasseem, 2020. "Do GCC market-oriented labor policies encourage inward FDI flows?," Research in International Business and Finance, Elsevier, vol. 51(C).

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