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The Strategy of foreign-invested manufacturing enterprises in China: Export-orientated and market-orientated FDI revisited


  • Peter Buckley
  • Chen Meng


This paper examines export-orientated and market-orientated foreign direct investment (FDI) in China's manufacturing industry. Based on Fung's (1995) survey estimation of China's market-orientated FDI in 1992 and China's Third National Industrial Census in 1995, we quantify the proportion of market-orientated FDI in China 1992-2002. By combining and verifying various data sources, our estimation shows that market-orientated FDI accounts for the majority of China's total inward FDI in manufacturing industry and has grown faster than export-orientated FDI over the period 1992-2002. Our industry level analysis suggests that Overseas Chinese investors are more export-orientated than Western investors. The study suggests that many inward investors follow a dual market strategy. The coexistence of export-orientated and Chinese domestic market-orientated FDI is a reflection of the flexibility of MNEs to adjust and adapt ownership attributes to the local market context. The study offers insights into the evolutionary development path taken by foreign-invested manufacturing enterprises in China.

Suggested Citation

  • Peter Buckley & Chen Meng, 2005. "The Strategy of foreign-invested manufacturing enterprises in China: Export-orientated and market-orientated FDI revisited," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 3(2), pages 111-131.
  • Handle: RePEc:taf:jocebs:v:3:y:2005:i:2:p:111-131 DOI: 10.1080/14765280500120112

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    References listed on IDEAS

    1. Douglas P Woodward & Robert J Rolfe, 1993. "The Location of Export-Oriented Foreign Direct Investment in the Caribbean Basin," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(1), pages 121-144, March.
    2. 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.
    3. Haishun Sun & Phillip Hone & Hristos Doucouliago, 1999. "Economic openness and technical efficiency: A case study of Chinese manufacturing industries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(3), pages 615-636, November.
    4. Yingqi Wei & Xiaming Liu & David Parker & Kirit Vaidya, 1999. "The Regional Distribution of Foreign Direct Investment in China," Regional Studies, Taylor & Francis Journals, vol. 33(9), pages 857-867.
    5. Zhang, Kevin Honglin & Markusen, James R., 1999. "Vertical multinationals and host-country characteristics," Journal of Development Economics, Elsevier, vol. 59(2), pages 233-252, August.
    6. Lucas, Robert E. B., 1993. "On the determinants of direct foreign investment: Evidence from East and Southeast Asia," World Development, Elsevier, vol. 21(3), pages 391-406, March.
    7. Hein, Simeon, 1992. "Trade Strategy and the Dependency Hypothesis: A Comparison of Policy, Foreign Investment, and Economic Growth in Latin America and East Asia," Economic Development and Cultural Change, University of Chicago Press, vol. 40(3), pages 495-521, April.
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    Cited by:

    1. repec:spr:jknowl:v:8:y:2017:i:4:d:10.1007_s13132-016-0367-7 is not listed on IDEAS
    2. repec:spr:manint:v:49:y:2009:i:2:d:10.1007_s11575-008-0135-4 is not listed on IDEAS

    More about this item


    Export-orientated FDI; market-orientated FDI; foreign-invested enterprises (FIEs); China; Jel Codes: L1; M21;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics


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