Building a Favourable Investment Environment: Evidence for the Facilitation of FDI in China

The determinants of Chinese outward foreign direct investment

“…The Chinese diaspora is acknowledged to have contributed to the integration of China into the world economy since 1979, especially in positively influencing inbound FDI from Singapore, the Republic of China (Taiwan) and Hong Kong (Henley et al, 1999;Ng and Tuan, 2002;Yeung, 1999;Sikorski and Menkhoff, 2000). 5 Strong economic connections amongst overseas Chinese and the importance of 'guanxi' (the ancient system of personal relationships and social connections based on mutual interest and benefit) in Chinese business dealings may also influence patterns of Chinese ODI (Standifird and Marshall, 2000;Luo, 1997;Tong, 2003).…”

The role of human mobility in promoting Chinese outward FDI: A neglected factor?

“…Prior research on human mobility has largely focused on the role of diaspora (Ng and Tuan, 2002;Smart and Hsu, 2004;Tung and Chung, 2010). One of the characteristic features of the diaspora is that they possess relational assets which are embedded in ethnic or familial networks within a specific minority population in host countries (Dunning, 2002;Erdener and Shapiro, 2005).…”

“…Recent studies in the context of China have found that the Chinese diaspora contributed to a large proportion of Chinese IFDI from South and Southeast Asia and facilitated bilateral trade between these countries and China, especially in the early stages of China's economic reform (Ng and Tuan, 2002;Smart and Hsu, 2004;Tung and Chung, 2010) and thereby started to facilitate Chinese OFDI (Buckley et al, 2007). Some studies have found that overseas Chinese investors have tended to rely heavily on ethnic and familial links in order to minimise risks and reduce psychic distance (Lau, 2003;Zhan, 1995).…”

“…Hence, the impact of networks established through human mobility varies, depending on the scope and scale of human mobility. While earlier research has focused on the role of diaspora on IFDI in China, these studies can hardly capture the dynamic characteristics and the global scale of Chinese overseas networks (Ng and Tuan, 2002;Smart and Hsu, 2004;Tung and Chung, 2010). More and more Chinese students/scientists have studied/worked in developed countries, such as the US, Canada, Australia, the EU and Japan (Guo et al, 2009;Wang, 2007).…”

Chinese Outward Foreign Direct Investment: Is ASEAN a New Destination?

“…Furthermore, we use common language variable, a Chinese language is spoken by at least 9% of the population in both countries, to proxy for culture proximity. The result influencing positively China's OFDI (Buckley et al, 2007;Ng & Tuan, 2002). Finally, other control variables such as distance, landlocked, and OECD variables have expected signs.…”