Chinese OFDI Research Papers - Academia.edu (original) (raw)

“The shift in economic power from West to East is accelerating” - John O’Sullivan. As an emerging market economy, the People’s Republic of China becomes one of the world’s largest foreign direct investors. This huge outward investment flow is supported with the Chinese government “go global’ policy for sustainable development. Little attention has been dedicated in international business studies to this new swing of business globalization from mainland China. Even though Chinese OFDI in EU is growing, these companies so far do not possess sufficient advantages especially in terms of high-end industry technology and skills to compete against the EU giants. The strategy of Chinese companies is industry-oriented, country-specific and targets mainly the easily transferable resources since these firms are categorized as latecomers firms. With this said, several issues are of interest at this point. The first circumstance is the level of industry specific investments in relation to home capacity R&D absorption and stimulation. On the other hand, these companies that compete on the EU market have other goals in mind. Development, market share, learning, acquisition of foreign high-end assets, strategic knowledge and valuable resources motivate Chinese firms to invest oversees. Many possible consequences may arise from these investments. The globalization of business firms from transitional economies throughout the world has become increasingly important aspect in sustainable development. Thus by far, boosting technological progress has to be the priority in order to sustain high growth. For this reason, technology transfer from developed countries as well as stimulation of indigenous innovation is indispensable. Converging the Chinese economy, especially the high-end product sector to its European counterparts would pave the way for its future progress. The mainstream of researches show that Chinese investment can not be explained with the modern western theories of internationalization since these “late comers’ invest without possessing the necessary advantages in order to be competitive abroad; instead they “unconsciously” invest to acquire them by “leapfrogging” several stages of indigenous innovation.

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- Sustainable Development, internationalization of MNEs, Chinese OFDI
- by Jane Lu and +1
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- Africa, Political Risks, Chinese OFDI

State capitalism is attracting burgeoning attention but comes with inconsistent findings toward internationalization. Given its prevalent appearances, the study has investigated the effect of state equity on outward foreign direct investment (OFDI) under the Belt and Road Initiative (BRI), which may constitute a challenge to the international business theory and new hope for companies in emerging economies. Anchoring on the agentic perspective of institutional theory and a sample of Chinese public listed firms, we have unveiled that higher state equity pushes greater proactiveness in investing in those BRI destinations. However, state equity generates stronger pushing effects when the equity source is not from the central government whereas the organizational top managers' foreign exposures attenuate such pressures. At the institutional level, furthermore, the coastal locale attenuates the effects of such pressures whereas firms are more likely to invest in countries with bilateral investment treaties (BITs) under the BRI theme. Overall, the study should extend our understandings toward the BRI phenomenon and enrich the theoretical knowledge of state capitalism from a political perspective.

- by Bin Liu
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- State Ownership, Chinese OFDI, Belt and road initiative

Using records from the Shanghai Stock Exchange, this article examines the rise of OFDI by China’s dairy giants as the result of the consolidation of the domestic industry, the political promotion of agrarian globalisation, and the complex consumer appeal of foreign foods. Two contrasting case studies show how the aims and strategies of dairy investments have changed. Guangming’s disastrous 2014 purchase of a controlling stake in Israel’s Tnuva dairy cooperative capped off the initial rush for branded assets. In contrast, the China Animal Husbandry Group’s successful investment in the Mataura Valley Milk plant in New Zealand represents the subsequent trend towards greenfield investments in productive capacity.

- by Feifei Cai
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- Community Development, China's foreign policy, Labor Rights, Chinese OFDI

This research aims to understand the role that Chinese policies and guidelines play in governing Chinese companies overseas, through exploring the experiences and perceptions of representatives in those companies. This discussion paper presents the key findings of fieldwork in Mozambique, Kenya and Uganda during August–September 2015, including a survey and interviews with fifty-eight Chinese personnel working for Chinese companies in these locations. Our findings revealed a complex governance matrix influencing the environmental and social performance of Chinese companies in Africa, in which Chinese policies play only a relatively minor role.

- by Feifei Cai
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- Africa, Governance, China's foreign policy, Chinese OFDI

China's ODI in Latin America and the Caribbean is entering into the second phase with diversification of economic actors and industries of investment. This paper extracts the approved projects by Chinese Ministry of Commerce from its online database between 2003-2012, and fits a random effect negative binomial regression model. Our statistical estimates on the one hand confirm some of the previous findings on the disparity between Chinese public and private investors in their ODI motivations and perception of risks, on the other hand find that host country institutions are not purely ownership specific, but also contingent on industries and activities in which firms tend to invest. The direction of institutional effect is not consistent across sectors and firm types. The revealed complexity of China's ODI in Latin America and the Caribbean suggests a multi-level framework in further research, which treats Chinese transnational firms as endogenously heterogeneous beyond the dichotomous categorisation according to corporate ownership.

- by Lin Yue
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- China and Latin America, Chinese OFDI

As China continues to expand its outward foreign direct investment (OFDI)
in countries along the “Belt and Road,” Chinese investment enterprises face an increasingly complex
external environment, in which the influence
of institutional distance and cultural distance has become more prominent. According to China’s
OFDI panel data of 94 countries from 2003 to 2017,
especially the data of 61 countries along with the “Belt and Road,” this study demonstrates that
institutional distance, in general, promotes China’s OFDI to countries along the “Belt and Road,”
whereas cultural distance
inhibits OFDI. Moreover, the inhibition effect of cultural distance is signifi- cantly more
substantial than the promotion effect of institutional distance, indicating that cultural distance
is more important than institutional dis-
tance. Also, the promotion and inhibition effects are generally consistent with each other in
different periods, but they are different due to the
imbalance of economic development among the countries. In the subdiv- ision dimension,
institutional distance like Control of Corruption, Voice, and Accountability, and cultural
distance like Masculinity vs. Femininity,
Uncertainty Avoidance, and long-term vs. short-term Orientation exert more significant influences
on China’s OFDI than the other subdivision
dimensions. Therefore, China should pay special attention to the invest- ment effect of specific
dimensions of institutional distance and cultural dis- tance in promoting the “Belt and Road,” and
continuously optimize the
investment layout along the “Belt and Road” in the future.

By employing a comparative method that analyzes China’s increasing presence in different Latin America countries, this study explores key features and implications of Beijing’s approach towards this region. Colombia, Ecuador and Peru are used as case studies to evaluate China’s diplomatic rhetoric and the degree to which trade and investment realities live up to the goals proclaimed. Each of the countries examined seeks a more balanced relationship with external actors and recognizes China’s increased presence in the domestic political economy. Beijing seeks to distinguish itself as a soft power and “South-South” partner, and yet its ability to maintain this stance is complicated by the inevitable asymmetry that a rising China implies. The paper argues
that China’s economic involvement in terms of trade, aid, loans and investment is indisputably important, but just one opportunity amongst many for these countries to achieve the political and economic goals that they have set for themselves.