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Testing the Asset-seeking Hypothesis :through the Investments of Chinese and Indian Firms in Europe

Author

Listed:
  • Yong, He

    () (University of Auvergne)

  • Hong, Zhou

    (Fudan University)

Abstract

We use the investments of Chinese and Indian MNCs in Europe to test the hypothesis that the main motivation of the Southern MNCs for investing in the Northern countries is asset- or technology- seeking. After showing that the previous work has not adequately tested this hypothesis due to its use of country-level FDI flow data, we conduct our tests with count data models tests. The results reveal that this motivation for Chinese MNCs is strong, whereas Indian MNCs, due to their excessive concentration in the UK and in software sector, have a weaker asset-seeking motivation than Chinese MNCs.

Suggested Citation

  • Yong, He & Hong, Zhou, 2012. "Testing the Asset-seeking Hypothesis :through the Investments of Chinese and Indian Firms in Europe," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 27, pages 564-583.
  • Handle: RePEc:ris:integr:0586
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    More about this item

    Keywords

    Location Strategy; China; India; The Southern MNC; Asset-seeking FDI; Europe;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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