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A Critical Revision of the Empirical Literature on Chinese Outward Investment: A New Proposal

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  • Carlos Rodríguez

    ()
    (University of the Basque Country, Spain)

  • Ricardo Bustillo

    ()
    (University of the Basque Country, Spain)

Abstract

Research on China’s role in the globalisation of economic activity focuses mainly on its involvement in trade and on its competitiveness as a manufacturing location for foreign investors. However, since the mid-1990s China’s outward foreign direct investment (OFDI) has become an important part of its integration into the global economy. This dimension is poorly understood, and few empirical studies about the drivers behind Chinese OFDI have been published thus far. After reviewing critically the empirical literature, which provides ambiguous results about the explanatory power of some of the large list of determinants put forward, we aim to provide a more accurate description of the motives behind Chinese OFDI. Using a panel data approach for the period 1995 to 2009 and for a large host country sample, we identify some key drivers. We find that host market size, natural resources and FDI openness are of paramount relevance. However, the asset seeking hypothesis is not confirmed.

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Bibliographic Info

Article provided by Savez ekonomista Vojvodine, Novi Sad, Serbia in its journal Panoeconomicus.

Volume (Year): 58 (2011)
Issue (Month): 5 (December)
Pages: 715-733

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Handle: RePEc:voj:journl:v:58:y:2011:i:5:p:715-733

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Web page: http://www.panoeconomicus.rs/

Related research

Keywords: China; Outward foreign direct investment; Multinational enterprises;

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References

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  1. 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.
  2. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, December.
  3. Shige Makino & Chung-Ming Lau & Rhy-Song Yeh, 2002. "Asset-Exploitation Versus Asset-Seeking: Implications for Location Choice of Foreign Direct Investment from Newly Industrialized Economies," Journal of International Business Studies, Palgrave Macmillan, vol. 33(3), pages 403-421, September.
  4. 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.
  5. John Child & Suzana B. Rodrigues, 2005. "The Internationalization of Chinese Firms: A Case for Theoretical Extension?," Management and Organization Review, International Association of Chinese Management Research, vol. 1(3), pages 381-410, November.
  6. Deng, Ping, 2009. "Why do Chinese firms tend to acquire strategic assets in international expansion?," Journal of World Business, Elsevier, vol. 44(1), pages 74-84, January.
  7. Ivar Kolstad & Arne Wiig, 2009. "What determines Chinese outward FDI?," CMI Working Papers 3, CMI (Chr. Michelsen Institute), Bergen, Norway.
  8. Guy V.G. Stevens, 1993. "Exchange rates and foreign direct investment: a note," International Finance Discussion Papers 444, Board of Governors of the Federal Reserve System (U.S.).
  9. Yin-Wong Cheung & Xingwang Qian, 2009. "Empirics Of China'S Outward Direct Investment," Pacific Economic Review, Wiley Blackwell, vol. 14(3), pages 312-341, 08.
  10. 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.
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Cited by:
  1. Christian Milelli & Alice Sindzingre, 2013. "Chinese Outward Foreign Direct Investment in Developed and Developing Countries: Converging Characteristics?," EconomiX Working Papers 2013-34, University of Paris West - Nanterre la Défense, EconomiX.

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