IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

A sector perspective on Chinese outward FDI: The automotive case

  • Amighini, Alessia A.
  • Franco, Chiara
Registered author(s):

    We provide a sector perspective on the drivers of Chinese outward foreign direct investments (ODI) by analyzing the automotive sector over the years 2006–2011. Following the widespread literature on host-country determinants of foreign direct investments (FDI), we distinguish among economic, institutional and technological factors. We find that Chinese automotive ODI are mostly driven by the market size of host economies – a result which is robust to alternative specifications – but important non-linear effects are at work, i.e. their market-seeking investment strategies are targeted to non high-income countries. Moreover, macroeconomic stability and efficient labour markets both act as attraction factors, while the same does not seem to be true for political stability. Finally, we detect important national- and sector-agglomeration effects.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X13000771
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal China Economic Review.

    Volume (Year): 27 (2013)
    Issue (Month): C ()
    Pages: 148-161

    as
    in new window

    Handle: RePEc:eee:chieco:v:27:y:2013:i:c:p:148-161
    Contact details of provider: Web page: http://www.elsevier.com/locate/chieco

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Agnès Bénassy-Quéré & Maylis Coupet & Thierry Mayer, 2007. "Institutional Determinants of Foreign Direct Investment," The World Economy, Wiley Blackwell, vol. 30(5), pages 764-782, 05.
    2. Yadong Luo & Rosalie L Tung, 2007. "International expansion of emerging market enterprises: A springboard perspective," Journal of International Business Studies, Palgrave Macmillan, vol. 38(4), pages 481-498, July.
    3. Mariya Aleksynska & Olena Havrylchyk, 2011. "FDI from the South: the Role of Institutional Distance and Natural Resources," Working Papers 2011-05, CEPII research center.
    4. Liu, Hong & Li, Kequan, 2002. "Strategic Implications of Emerging Chinese Multinationals:: The Haier Case Study," European Management Journal, Elsevier, vol. 20(6), pages 699-706, December.
    5. Claessens, Stijn & van Horen, Neeltje, 2012. "Being a foreigner among domestic banks: Asset or liability?," Journal of Banking & Finance, Elsevier, vol. 36(5), pages 1276-1290.
    6. Disdier, Anne-Celia & Mayer, Thierry, 2004. "How different is Eastern Europe? Structure and determinants of location choices by French firms in Eastern and Western Europe," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 280-296, June.
    7. Mohsin Habib & Leon Zurawicki, 2002. "Corruption and Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan, vol. 33(2), pages 291-307, June.
    8. Bruce A. Blonigen, 2005. "A Review of the Empirical Literature on FDI Determinants," NBER Working Papers 11299, National Bureau of Economic Research, Inc.
    9. 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.
    10. 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.
    11. repec:bla:chinae:v:19:y:2011:i::p:1-21 is not listed on IDEAS
    12. Cheng, Leonard K. & Kwan, Yum K., 2000. "What are the determinants of the location of foreign direct investment? The Chinese experience," Journal of International Economics, Elsevier, vol. 51(2), pages 379-400, August.
    13. David W Loree & Stephen E Guisinger, 1995. "Policy and Non-Policy Determinants of U.S. Equity Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan, vol. 26(2), pages 281-299, June.
    14. Amighini, Alessia A., 2012. "China and India in the international fragmentation of automobile production," China Economic Review, Elsevier, vol. 23(2), pages 325-341.
    15. Yin-Wong Cheung & XingWang Qian, 2009. "The Empirics of China's Outward Direct Investment," Working Papers 172009, Hong Kong Institute for Monetary Research.
    16. 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.
    17. Alessia Amighini & Roberta Rabellotti & Marco Sanfilippo, 2011. "China's Outward FDI: An Industry-level Analysis of Host Country Determinants," CESifo Working Paper Series 3688, CESifo Group Munich.
    18. Amighini, Alessia A. & Rabellotti, Roberta & Sanfilippo, Marco, 2013. "Do Chinese state-owned and private enterprises differ in their internationalization strategies?," China Economic Review, Elsevier, vol. 27(C), pages 312-325.
    19. Head, Keith & Ries, John, 1996. "Inter-City Competition for Foreign Investment: Static and Dynamic Effects of China's Incentive Areas," Journal of Urban Economics, Elsevier, vol. 40(1), pages 38-60, July.
    20. 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.
    21. Jiajia Liu & Andrew Tylecote, 2009. "Corporate Governance and Technological Capability Development: Three Case Studies in the Chinese Auto Industry," Industry and Innovation, Taylor & Francis Journals, vol. 16(4-5), pages 525-544.
    22. repec:bla:chinae:v:19:y:2011:i::p:74-91 is not listed on IDEAS
    23. Sanjaya Lall and Manuel Albaladejo, . "Indicators of the Relative Importance of IPRs In Developing Countries," QEH Working Papers qehwps85, Queen Elizabeth House, University of Oxford.
    24. Co, Catherine Y., 1997. "Japanese FDI into the U.S. automobile industry: An empirical investigation," Japan and the World Economy, Elsevier, vol. 9(1), pages 93-108, March.
    25. Hegde, Deepak & Hicks, Diana, 2008. "The maturation of global corporate R&D: Evidence from the activity of U.S. foreign subsidiaries," Research Policy, Elsevier, vol. 37(3), pages 390-406, April.
    26. Li, Peter Ping, 2007. "Toward an integrated theory of multinational evolution: The evidence of Chinese multinational enterprises as latecomers," Journal of International Management, Elsevier, vol. 13(3), pages 296-318, September.
    27. He, Wei & Lyles, Marjorie A., 2008. "China's outward foreign direct investment," Business Horizons, Elsevier, vol. 51(6), pages 485-491.
    28. Hines, James R. Jr., 1999. "Lessons from Behavioral Responses to International Taxation," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 305-22, June.
    29. Michael Devereux & Rachel Griffith, 1996. "Taxes and the location of production: evidence from a panel of US multinationals," IFS Working Papers W96/14, Institute for Fiscal Studies.
    30. Elizabeth Asiedu, 2006. "Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability," The World Economy, Wiley Blackwell, vol. 29(1), pages 63-77, 01.
    31. Wheeler, David & Mody, Ashoka, 1992. "International investment location decisions : The case of U.S. firms," Journal of International Economics, Elsevier, vol. 33(1-2), pages 57-76, August.
    32. Michael Devereux & Harold Freeman, 1995. "The impact of tax on foreign direct investment: Empirical evidence and the implications for tax integration schemes," International Tax and Public Finance, Springer, vol. 2(1), pages 85-106, February.
    33. Ricardo G Flores & Ruth V Aguilera, 2007. "Globalization and location choice: an analysis of US multinational firms in 1980 and 2000," Journal of International Business Studies, Palgrave Macmillan, vol. 38(7), pages 1187-1210, December.
    34. 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.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:27:y:2013:i:c:p:148-161. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.