The Determinants of Chinese MNEs’ Performance Effect: China OFDI From the Portfolio Perspective

Hsin Mei Lin () and I-Fan Yen
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Hsin Mei Lin: National Chi Nan University
I-Fan Yen: National Chi Nan University

A chapter in LISS 2014, 2015, pp 1585-1589 from Springer

Abstract: Abstract This paper develops a portfolio perspective on foreign direct investments of Chinese firms, which represents the pattern of multiple simultaneous portfolio investments. This study investigates the determinants of firm performance of Chinese outward foreign direct investment (OFDI) and the extent to which three special explanations (international diversification, home government involvement and host country risk) need to be rooted within the general theory of multinational firms. By testing a comprehensive sample of 1598 panel-data observations of 45 Chinese publicly-listed firms from 2000 to 2010, we find strong support for the pattern of multiple simultaneous portfolio investment, performance effect seems to be associated with high levels of home government involvement in, with diversified projects and countries to, and with low levels of host country risk throughout the internationalization strategy. We conclude that Chinese OFDI is indeed distinctive in certain respects that determinants of firm performance effect need to be rooted within the general theory where implications for IB theory.

Keywords: Portfolio investments; International diversification; Home government involvement; Host country risk (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-662-43871-8_228

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DOI: 10.1007/978-3-662-43871-8_228

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