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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front Econ Chin    2013, Vol. 8 Issue (3) : 309-336    https://doi.org/10.3868/s060-002-013-0017-2
research-article
China’s Outward FDI: An Industry-Level Analysis of Host-Country Determinants
Alessia Amighini1(), Roberta Rabellotti2(), Marco Sanfilippo3()
1. Department of Economics and Business, University of Piemonte Orientale, Novara 28100, Italy; 2. Department of Political and Social Sciences, University of Pavia, Pavia 27100, Italy; 3. Robert Schuman Centre for Advanced Studies, European University Institute, Florence 50133, Italy
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Abstract

We use disaggregated data by country and industry to empirically analyze the host country determinants of Chinese outward foreign direct investment (FDI) for the years 2003 to 2011. Our results suggest that the host-country determinants of Chinese FDI differ between high- and low-income countries. While all Chinese FDI is invariably market seeking, other motivations stand out for differing sectors in specific country groups. The resource seeking motivation is relevant for manufacturing FDI to high-income countries with relatively high fuel abundance, and to low-income countries with primary resource abundance (other than fuels). Differently, the strategic-asset seeking motivation, measured by the level of R&D spending on GDP, only positively and significantly affects Chinese manufacturing and service FDI to OECD countries, while higher education levels are an attraction factor for all investing firms. Natural resource is an important attraction factor for Chinese FDI, not only in resource-related sectors, but also in manufacturing and service sectors. Finally, Chinese FDI tends to follow exports (rather than foster them), especially in service sectors.

Keywords China      foreign direct investment      internationalization      trade-FDI nexus     
Corresponding Author(s): Alessia Amighini,Email:alessia.amighini@eco.unipmn.it; Roberta Rabellotti,Email:roberta.rabellotti@unipv.it; Marco Sanfilippo,Email:marco.sanfilippo@eui.eu   
Issue Date: 05 September 2013
 Cite this article:   
Alessia Amighini,Roberta Rabellotti,Marco Sanfilippo. China’s Outward FDI: An Industry-Level Analysis of Host-Country Determinants[J]. Front Econ Chin, 2013, 8(3): 309-336.
 URL:  
https://academic.hep.com.cn/fec/EN/10.3868/s060-002-013-0017-2
https://academic.hep.com.cn/fec/EN/Y2013/V8/I3/309
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