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The Empirics of China's Outward Direct Investment

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Author Info
Yin-Wong Cheung ()
Xingwang Qian ()

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Abstract

We investigate the empirical determinants of China’s outward direct investment (ODI). It is found that China’s investments in developed and developing countries are driven by different sets of factors. Subject to the differences between developed and developing countries, there is evidence that a) both market seeking and resources seeking motives drive China’s ODI, b) the Chinese exports to developing countries induce China’s ODI, c) China’s international reserves promote its ODI, and d) the Chinese capital tends to agglomerate among developed economies but diversify among developing economies. Similar results are obtained using alternative ODI data. We do not find substantial evidence that China invests in African and oil-producing countries mainly for their natural resources.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 2621.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2621

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Related research
Keywords: market seeking; resources seeking; servicing exports; international reserves; agglomeration effect;

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Find related papers by JEL classification:
F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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