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A Revisit of Motives for Chinese Outward Foreign Direct Investment: The Role of the Institution in Host Countries

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  • Nguyen Thi Tuong Anh
  • Hung Quang Doan
  • Tuan Anh Bui
  • Nam Hoang Vu
  • Duong Thuy Thanh Le

Abstract

This study explores how the institution of the host countries affects the natural resource-seeking and strategic asset-seeking motives of the Chinese outward foreign direct investment. Using the system GMM estimation method and data of the Chinese outward foreign direct investment during the period from 2003 to 2020, the study shows that the search for strategic assets by the Chinese outward foreign direct investment is directed toward the host countries with well-established institutions, while the search for natural resources is driven by poor institutions of the host countries. Findings from this study provide empirical evidence for policymakers to formulate appropriate foreign investment policies given the dynamics of Chinese foreign direct investment worldwide.

Suggested Citation

  • Nguyen Thi Tuong Anh & Hung Quang Doan & Tuan Anh Bui & Nam Hoang Vu & Duong Thuy Thanh Le, 2022. "A Revisit of Motives for Chinese Outward Foreign Direct Investment: The Role of the Institution in Host Countries," SAGE Open, , vol. 12(4), pages 21582440221, December.
    • Handle: RePEc:sae:sagope:v:12:y:2022:i:4:p:21582440221142519
    DOI: 10.1177/21582440221142519
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