This study investigates the determinants of Chinese outward direct investment (ODI) and the extent to which three special explanations (capital market imperfections, special ownership advantages and institutional factors) need to be nested within the general theory of the multinational firm. We test our hypotheses using official Chinese ODI data collected between 1984 and 2001. We find Chinese ODI to be associated with high levels of political risk in, and cultural proximity to, host countries throughout, and with host market size and geographic proximity (1984 to 1991) and host natural resources endowments (1992 to 2001). We find strong support for the argument that aspects of the special theory help to explain the behaviour of Chinese MNEs.

This study investigates the determinants of Chinese outward direct investment (ODI) and the extent to which three special explanations (capital market imperfections, special ownership advantages and institutional factors) need to be nested within the general theory of the multinational firm. We test our hypotheses using official Chinese ODI data collected between 1984 and 2001. We find Chinese ODI to be associated with high levels of political risk in, and cultural proximity to, host countries throughout, and with host market size and geographic proximity (1984 to 1991) and host natural resources endowments (1992 to 2001). We find strong support for the argument that aspects of the special theory help to explain the behaviour of Chinese MNEs.

This is a repository copy of A retrospective and agenda for future research on Chinese outward foreign direct investment.

and Key Results 0 Recent expansion of Chinese outward direct investment is analysed at two levels: at the aggregate level using Chinese Ministry of Commerce data and at the level of the individual FDI project using data compiled by the State Administration of Foreign Exchange. 0 Project level analysis reveals wholly-owned projects are increasingly displacing joint ventures as the predominant mode of entry. 0Changes to the investment motivations are discernable in market-seeking FDI: with defensive and offensive FDI increasingly supplanting trade-related investment activity, and in strategic asset-seeking FDI: with improved access to foreign-owned technologies, brands, and distribution channels gaining importance.

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