Outward FDI of Mainland Chinese MNEs: Its Drivers and the Way Forward from the Resource Dependence and Political Economy Perspectives

Tariq Hameed Alvi

International Journal of Science and Business, 2019, vol. 3, issue 5, 163-172

Abstract: This study contends that Resource Dependence Theory and Political Economy are pertinent perspectives to investigate drivers of Outward FDI from China by integrating them with other frameworks such as OLI-Framework, Collusion-and-Rivalry Framework, and Three-Stage Model of OFDI for Developing Countries. In so doing, it develops four fundamental propositions. First, OFDI from China will grow further in the coming years. Second, China’s increasing emphasis on North-Atlantic is attributed to the intent of Chinese MNEs to move to the higher end of the value chain. Third, the Chinese MNEs will move to more market-driven transactions after Chinese MNEs become prevalent in international markets. Fourth, Chinese MNEs will focus more on services than manufacturing in the years to come. The author hopes that these propositions will encourage empirical research on OFDI from China. The accuracy of these propositions, however, is contingent on the harmonious relationship between China and the host countries.

Keywords: Multinational Enterprises (MNEs); Outward Foreign Direct Investment (OFDI); Inward Foreign Direct Investment (FDI); Chinese state-owned enterprises (SOEs); Resource Dependence Theory (RDT); OLI-Framework; Collusion-and-Rivalry framework; and Three-stage model of OFDI (search for similar items in EconPapers)
Date: 2019
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