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Drivers of China’s outward foreign direct investment: a comprehensive panel data analysis

Author

Listed:
  • Tong Tong
  • Tarlok Singh
  • Bin Li
  • Lewis Liu

Abstract

Purpose - This paper aims to investigate the primary motivations for China’s outward foreign direct investment (ODI) decisions. Design/methodology/approach - Using a panel data sample covering the period 2003–2012 and a comprehensive set of 176 host countries. Findings - This study finds that market size, trade variables and natural resource variables are strongly related to the Chinese ODI stocks. This indicates that Chinese ODI decisions are driven by both market- and resource-seeking motives. The subperiod sample test results lend even stronger support to the market-seeking motive for ODI. Originality/value - These results seem to emerge from the policy changes that were undertaken during the sample period. Consistent with subgroup tests, this study finds that the main purposes of China’s ODI in the top 100 countries are natural resource explorations and production line replacements.

Suggested Citation

  • Tong Tong & Tarlok Singh & Bin Li & Lewis Liu, 2023. "Drivers of China’s outward foreign direct investment: a comprehensive panel data analysis," Pacific Accounting Review, Emerald Group Publishing Limited, vol. 35(4), pages 620-644, July.
    • Handle: RePEc:eme:parpps:par-08-2022-0131
    DOI: 10.1108/PAR-08-2022-0131
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    More about this item

    Keywords

    China; Outward FDI; Motivations; Economic growth; Market seeking; Natural resources; F2; F14; F21;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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