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A sector perspective on Chinese outward FDI: The automotive case

Alessia Amighini () and Chiara Franco

China Economic Review, 2013, vol. 27, issue C, 148-161

Abstract: We provide a sector perspective on the drivers of Chinese outward foreign direct investments (ODI) by analyzing the automotive sector over the years 2006–2011. Following the widespread literature on host-country determinants of foreign direct investments (FDI), we distinguish among economic, institutional and technological factors. We find that Chinese automotive ODI are mostly driven by the market size of host economies – a result which is robust to alternative specifications – but important non-linear effects are at work, i.e. their market-seeking investment strategies are targeted to non high-income countries. Moreover, macroeconomic stability and efficient labour markets both act as attraction factors, while the same does not seem to be true for political stability. Finally, we detect important national- and sector-agglomeration effects.

Keywords: FDI determinants; Host country factors; China; Automotive sector; Agglomeration effects (search for similar items in EconPapers)
JEL-codes: F14 F21 F23 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:27:y:2013:i:c:p:148-161

DOI: 10.1016/j.chieco.2013.09.002

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China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

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