Home country heterogeneity in the determinants of China’s inward foreign direct investment

Zheng, P. and Tan, H. 2011. Home country heterogeneity in the determinants of China’s inward foreign direct investment. Transnational Corporations. 20 (2), pp. 1-28.

TitleHome country heterogeneity in the determinants of China’s inward foreign direct investment
AuthorsZheng, P. and Tan, H.
Abstract

This study explores whether the determinants and motivations of China’s

inward foreign direct investment (FDI) are heterogeneous among the

home economies. Categorizing the home economies into two sets of

groups in terms of their economic development levels and geographic

locations, this research found that China’s inward FDI determinants

and motivations are different between the groups. Chinese inward

FDI from non-OECD developing economies is more likely to be both

horizontal and vertical types for efficiency-seeking and market-seeking

purposes, while FDI from OECD developed economies is more likely

to be horizontal market-seeking. FDI from Europe is more likely to be

driven by the large Chinese market, while FDI from North America is

more likely to be stimulated by China’s low input costs, and FDI from

Asia is more likely to be attracted by both the large Chinese market and

its low costs. These findings will be useful to the host government in

devising better policies to enhance positive externalities created by the

inflows of FDI.

JournalTransnational Corporations
Journal citation20 (2), pp. 1-28
ISSN1014-9562
YearAug 2011
PublisherUnited Nations Conference on Trade and Development
Web address (URL)http://unctad.org/en/Docs/unctaddiaeia2011v202_en.pdf
Publication dates
PublishedAug 2011

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