A sector perspective on Chinese outward FDI: The automotive case

Alessia Amighini, Chiara Franco, Alessia A. Mighini

Research output: Contribution to journalArticle

16 Citations (Scopus)

Abstract

We provide a sector perspective on the drivers of Chinese outward foreign direct investments (ODI) by analyzing the automotive sector over the years 2006–2011. Following the widespread literature on host-country determinants of foreign direct investments (FDI), we distinguish among economic, institutional and technological factors. We find that Chinese automotive ODI are mostly driven by the market size of host economies – a result which is robust to alternative specifications – but important non-linear effects are at work, i.e. their market-seeking investment strategies are targeted to non high-income countries. Moreover, macroeconomic stability and efficient labour markets both act as attraction factors, while the same does not seem to be true for political stability. Finally, we detect important national- and sector-agglomeration effects.
Original languageEnglish
Pages (from-to)148-161
Number of pages14
JournalChina Economic Review
Volume27
Publication statusPublished - 2013
Externally publishedYes

Keywords

  • Automotive sector
  • China
  • FDI determinants
  • Host country factors

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