Emerging Multinationals: A Comparison of Chinese and Indian Outward Foreign Direct Investment
AbstractThe present study deals with the origin and growth of outward foreign direct investment (OFDI) by emerging Chinese and Indian multinationals and examines the locational determinants of such investments. Both Chinese and Indian OFDI flows were observed to have surged after the adoption of economic openness policies by the home country in the late 1970s and the 1990s respectively and are now increasingly being driven by wholly-owned projects and acquisitions abroad. Indian and Chinese firms both started OFDI operations in developing countries and then they expanded into developed regions in the 1990s. Among locational factors, both Chinese and Indian OFDI projects are attracted by host country imports from the sources, greater strength of host currencies, rising host prices and host status of being offshore financial centres. While the Chinese multinationals were found to have preference for hosts with locational proximity, small size and high natural resource endowments, the Indian firms appear to choose countries with large size and that have bilateral investment treaty (BIT) with India irrespective of their physical distance from India.
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Bibliographic InfoArticle provided by Faculty of Economics and Administration, University of Malaya in its journal International Journal of Institutions and Economies.
Volume (Year): 3 (2011)
Issue (Month): 1 (April)
- emerging multinationals; outward FDI; China; India;
Find related papers by JEL classification:
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F29 - International Economics - - International Factor Movements and International Business - - - Other
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
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