A Revisit of Motives for Chinese Outward Foreign Direct Investment: The Role of the Institution in Host Countries

Nguyen Thi Tuong Anh, Hung Doan (), Tuan Anh Bui, Vu Nam () and Duong Thuy Thanh Le

SAGE Open, 2022, vol. 12, issue 4, 21582440221142519

Abstract: This study explores how the institution of the host countries affects the natural resource-seeking and strategic asset-seeking motives of the Chinese outward foreign direct investment. Using the system GMM estimation method and data of the Chinese outward foreign direct investment during the period from 2003 to 2020, the study shows that the search for strategic assets by the Chinese outward foreign direct investment is directed toward the host countries with well-established institutions, while the search for natural resources is driven by poor institutions of the host countries. Findings from this study provide empirical evidence for policymakers to formulate appropriate foreign investment policies given the dynamics of Chinese foreign direct investment worldwide.

Keywords: China; FDI; economic institution reform; motive; natural resources; strategic assets (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:12:y:2022:i:4:p:21582440221142519

DOI: 10.1177/21582440221142519

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