Going global: understanding China's outward foreign direct investment from motivational and institutional perspectives

Canfei He, Xiuzhen Xie and Shengjun Zhu

Post-Communist Economies, 2015, vol. 27, issue 4, 448-471

Abstract: Using recent Chinese data on outward foreign direct investment (OFDI) (2003-11), this study shows that Chinese OFDI has expanded in both distant developing and developed countries. Statistical analysis suggests that Chinese investors are attracted to countries with large market size, rich resources and strategic assets, and demand a sound legal system but avoid countries with the best rule of law. Chinese investors do not directly respond to political risk and corruption. However, they favour politically stable locations when seeking markets and care about political stability and corruption control when seeking resources. Institutional factors play a more significant role in the investment decision making prior to the actual investments, but the moderating role of institutions is influential for the actual investments. Chinese investors are more likely to seek markets and resources in developing countries, with careful evaluation of institutional quality.

Date: 2015
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Citations: View citations in EconPapers (12)

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DOI: 10.1080/14631377.2015.1084716

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