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Revisiting the OLI Paradigm: The Institutions, the State, and China's OFDI

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  • Hao Liang
  • Bing Ren
  • Haikun Zhu

Abstract

We propose a modified theoretical framework based on John Dunning’s classical OLI paradigm in the international business literature to analyze Chinese firms’ fast-growing and aggressive outward foreign direct investment (OFDI). In particular, from an institutional perspective, we suggest a “state-stewardship” view to incorporate state institutions into the OLI paradigm. This paper supplements our earlier work (Ren, Liang, and Zheng, 2011) on identifying the formal institutional determinants of Chinese firms’ OFDI motivations and strategies, by further looking at the impact of direct and indirect policies, and the OFDI state-controlled financial intermediaries. Under our modified OLI framework we also examine the potential concerns on China’s state-backed OFDI and its implication on long-term sustainability.

Suggested Citation

  • Hao Liang & Bing Ren & Haikun Zhu, 2011. "Revisiting the OLI Paradigm: The Institutions, the State, and China's OFDI," CESifo Working Paper Series 3642, CESifo.
    • Handle: RePEc:ces:ceswps:_3642
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    References listed on IDEAS

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    Cited by:

    1. Lee Robinson & Alice Nicole Sindzingre, 2012. "China’s Ambiguous Impacts on Commodity-Dependent Countries: the Example of Sub-Saharan Africa (with a Focus on Zambia)," EconomiX Working Papers 2012-39, University of Paris Nanterre, EconomiX.

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    More about this item

    Keywords

    outward foreign direct investment; institutions; state-stewardship view; OLI paradigm;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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