What Determines Chinese Outward Foreign Direct Investment: An Empirical Research

<p>The rise of Chinese multinational enterprises (CMNEs) and the growth of Chinese outward foreign direct investment (OFDI) have been two important trends in the world economy. This dissertation aims to deliver a complete picture of Chinese OFDI by investigating what determines Chinese OFDI. Based on a perspective of international political economy, we use a multilevel framework which includes country level, industry level, and firm level to demonstrate a reciprocal relationship between the Chinese government’s political benefits and CMNEs’ economic benefits. The Chinese government plays the role of an organizer in this relationship to guarantee its political benefits and enlarge CMNEs’ economic benefits. We argue that taking advantage of such a reciprocal relationship and the role played by the Chinese government is an important motivation for Chinese OFDI. We generalize seven situations in which CMNEs’ OFDI could benefit from the reciprocal relationship and the role of the Chinese government. These situations include: CMNEs make OFDI in countries that are friendly to the Chinese government; CMNEs make OFDI in countries that have more Chinese contracted projects; CMNEs make OFDI in countries that have more Chinese OFDI stock; CMNEs make OFDI in countries that are suitable for production transfer; CMNEs make OFDI in countries that are good at technology development; CMNEs make OFDI in countries that are politically stable; and CMNEs make OFDI in countries that have difficulty in debt repayment. According to these situations, we derive seven hypotheses to test to what extent CMNEs take advantage of their reciprocal relationships with the Chinese government and the role of an organizer played by the Chinese government. A dataset consisting of 175 countries from 2003 to 2016 and regression models are used to test these hypotheses. We find that Chinese OFDI is more attracted to countries with a higher level of partnership with China, more Chinese contracted projects, more Chinese OFDI stock, and more advanced technologies. We have determined that Chinese OFDI uses different strategies in different groups of countries. Chinese OFDI is more likely to go to countries with the combination of higher manufacturing capacities and lower labor costs among OECD countries and developed countries. Chinese OFDI is more likely to go to countries with more natural resources among middle-income and low-income countries. We do not find evidence of Chinese OFDI’s preference for countries with higher political stability and higher debt levels. In general, our findings give some support to our argument that CMNEs take advantage of their reciprocal relationship with the Chinese government and the role of an organizer played by the Chinese government.</p>

Name thesis:degree_name

Political Science and Economics, PhD interfield

Level thesis:degree_level

Open Access Dissertation

Discipline thesis:degree_discipline

School of Social Science, Politics, and Evaluation

Year dc:date.available

2019

Author dc:creator

• Yu, Qiaoli

Contributors dc:contributor

• Graham Bird
• Thomas Willett

• Chinese multinational enterprises
• Outward Foreign Direct Investment
• Economics
• International Relations
• Political Science

Repository record dc:identifier

https://scholarship.claremont.edu/cgu_etd/340

OAI identifier oai:identifier

oai:scholarship.claremont.edu:cgu_etd-1375