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Chinese and Indian firms’ entry into Europe: characteristics, impacts and policy implications

Author

Listed:
  • Christian Milelli
  • Françoise Hay

Abstract

This contribution deals with the rise of direct investment flows from ‘third-world’ to ‘first-world’ countries. To analyze this trend, we chose to focus on China and India due to their high economic growth regime and their rapid pace to embrace the world economy, which place them at the forefront of the surging wave of FDI and multinational companies from emerging economies. The European Union which is the largest host region worldwide for FDI flows is the target of the paper, and the central point is to better assess the possible effects of the arrival of Chinese and Indian firms on its economy. The paper is based on firm-level data. After providing understanding on Chinese and Indian FDI on a global scale, we draw from the existing academic literature hypotheses that are tested on findings derived from a proprietary dataset. On the basis of these insights, we identify and discuss the plausible economic impacts of those investments on European economies.

Suggested Citation

  • Christian Milelli & Françoise Hay, 2008. "Chinese and Indian firms’ entry into Europe: characteristics, impacts and policy implications," EconomiX Working Papers 2008-35, University of Paris Nanterre, EconomiX.
  • Handle: RePEc:drm:wpaper:2008-35
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    File URL: http://economix.fr/pdf/dt/2008/WP_EcoX_2008-35.pdf
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    References listed on IDEAS

    as
    1. Huang,Yasheng, 2008. "Capitalism with Chinese Characteristics," Cambridge Books, Cambridge University Press, number 9780521898102, March.
    2. Rui, Huaichuan & Yip, George S., 2008. "Foreign acquisitions by Chinese firms: A strategic intent perspective," Journal of World Business, Elsevier, vol. 43(2), pages 213-226, March.
    3. Christian Milelli & Françoise Hay & Yunnan Shi, 2009. "Chinese firms enter Europe : some empirical evidence," Post-Print halshs-00421377, HAL.
    4. Randall Morck & Bernard Yeung & Minyuan Zhao, 2008. "Perspectives on China's outward foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(3), pages 337-350, April.
    5. Child, John & Rodrigues, Suzana B., 2005. "The Internationalization of Chinese Firms: A Case for Theoretical Extension?," Management and Organization Review, Cambridge University Press, vol. 1(03), pages 381-410, November.
    6. Deng, Ping, 2007. "Investing for strategic resources and its rationale: The case of outward FDI from Chinese companies," Business Horizons, Elsevier, vol. 50(1), pages 71-81.
    7. Deng, Ping, 2004. "Outward investment by Chinese MNCs: Motivations and implications," Business Horizons, Elsevier, vol. 47(3), pages 8-16.
    8. Liu, Xiaohui & Buck, Trevor & Shu, Chang, 2005. "Chinese economic development, the next stage: outward FDI?," International Business Review, Elsevier, vol. 14(1), pages 97-115, February.
    9. Pradhan, Jaya Prakash, 2007. "Trends and Patterns of Overseas Acquisitions by Indian Multinationals," MPRA Paper 12404, University Library of Munich, Germany.
    10. Filippov, Sergey & Saebi, Tina, 2008. "Europeanisation Strategy of Chinese Companies: Its Perils and Promises," MERIT Working Papers 055, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Caves, Richard E, 1971. "International Corporations: The Industrial Economics of Foreign Investment," Economica, London School of Economics and Political Science, vol. 38(149), pages 1-27, February.
    12. John Child & Suzana B. Rodrigues, 2005. "The Internationalization of Chinese Firms: A Case for Theoretical Extension?," Management and Organization Review, International Association of Chinese Management Research, vol. 1(3), pages 381-410, November.
    13. Markusen, James R & Maskus, Keith E, 2002. "Discriminating among Alternative Theories of the Multinational Enterprise," Review of International Economics, Wiley Blackwell, vol. 10(4), pages 694-707, November.
    14. Peter J Buckley & L Jeremy Clegg & Adam R Cross & Xin Liu & Hinrich Voss & Ping Zheng, 2007. "The determinants of Chinese outward foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 499-518, July.
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    Citations

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    Cited by:

    1. Milelli, Christian & Le Goff, Joëlle, 2012. "European inroads by BRICs’ firms:The M&A avenue," MPRA Paper 39865, University Library of Munich, Germany.
    2. Valeria Gattai, 2013. "The dragon and the elephant on the way to Italy," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2013(4), pages 63-87.
    3. Peter Nunnenkamp & Maximiliano Sosa Andrés, 2014. "Ownership Choices of Indian Direct Investors: Do FDI Determinants Differ between Joint Ventures and Wholly Owned Subsidiaries?," South Asian Journal of Macroeconomics and Public Finance, , vol. 3(1), pages 39-78, June.
    4. Wladimir Andreff, 2014. "Outward foreign direct investment by Brazilian and Indian multinational companies: comparison with Russian-Chinese multinationals," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01279896, HAL.
    5. Christian Milelli & Alice Sindzingre, 2013. "Chinese Outward Foreign Direct Investment in Developed and Developing Countries: Converging Characteristics?," EconomiX Working Papers 2013-34, University of Paris Nanterre, EconomiX.
    6. HERCIU Mihaela, 2015. "Emncs – Lessons On The Way To An Innovation-Based Development. Empirical Findings," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 10(2), pages 44-52, August.
    7. Nunnenkamp, Peter & Sosa Andrés, Maximiliano & Vadlamannati, Krishna Chaitanya & Waldkirch, Andreas, 2012. "What drives India's outward FDI?," Kiel Working Papers 1800, Kiel Institute for the World Economy (IfW).
    8. Wladimir Andreff, 2015. "Outward Foreign Direct Investment from BRIC countries: Comparing strategies of Brazilian, Russian, Indian and Chinese multinational companies," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 12(2), pages 79-131, December.

    More about this item

    Keywords

    foreign direct investment; European economies; policy implications;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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