Outward FDI from developing countries : a case of Chinese firms in South Africa
AbstractOutward foreign direct investment (FDI) from developing countries is increasing. In the research on FDI, it has been considered that only competitive and productive firms can invest in foreign countries. However, since the differences in competitiveness and productivity between multinational enterprises (MNEs) from developed and developing countries have not been explicitly investigated, we cannot say whether MNEs from developing countries can or cannot survive in competition with MNEs from developed countries as well as against competitive and productive indigenous firms in host countries. To examine the activities of MNEs from developing countries, this study investigates Chinese firms in South Africa. It reveals that in order to compensate for the weak brand recognition of Chinese products and to expand sales, Chinese firms have mainly been making products that are sold under the brand names of indigenous South African firms. Chinese firms have expanded their business in South Africa relying on the business resources of indigenous firms in the host country. This indicates that business with indigenous firms is significant for MNEs from developing countries in boosting competitiveness.
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Bibliographic InfoPaper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 385.
Date of creation: Feb 2013
Date of revision:
Publication status: Published in IDE Discussion Paper. No. 385. 2013.2
Postal: Publication Office, IDE 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545 JAPAN
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- M16 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - International Business Administration
This paper has been announced in the following NEP Reports:
- NEP-AFR-2013-03-16 (Africa)
- NEP-ALL-2013-03-16 (All new papers)
- NEP-DEV-2013-03-16 (Development)
- NEP-TRA-2013-03-16 (Transition Economics)
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