Exploring the role of institutions in Chinese OFDI: a systematic review and integrative framework

Christofi, Michael; Vrontis, Demetris; Makrides, Anna

doi:10.1080/13602381.2022.2013607

Cited by 21 publications

(11 citation statements)

References 102 publications

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“…It is argued that a high-quality institution is a crucial factor of FDI activity, because it lowers both the risk and the cost of doing business. A great number of empirical studies have also confirmed this relationship (Be´nassy-Que´re´et al, 2007;Christofi et al, 2022;Globerman & Shapiro, 2002;Liang et al, 2022). These findings are robust while controlling for the possible reverse causality between institutions and FDI flows (Be´nassy-Que´reé t al., 2007).…”

Section: Hypothesis Developmentmentioning

confidence: 80%

“…During the period after the global financial crisis, while global FDI has declined, China’s investment abroad has increased dramatically (Salidjanova, 2011; Sattar et al, 2022), particularly in economies with well-established institutions in Europe and North America (Figure 1). Large foreign exchange reserves and China’s surplus of savings are indicated as crucial factors that promote Chinese OFDI while searching for strategic assets in these markets (Christofi et al, 2022; Morck et al, 2008; Salidjanova, 2011). Based on these arguments, we formulate the following testable hypotheses.…”

Section: Theory and Hypothesis Developmentmentioning

confidence: 99%

“…The Chinese MNEs have been increasingly seeking firm-specific advantages by acquiring global brands, human capital, managerial know-how and advanced technology. This motive is coined by the strategic asset-seeking internationalization (Christofi et al, 2022; Deng, 2009; Liang et al, 2022). Chinese MNEs have more rapid internationalization than their counterparts in developed countries (Cui et al, 2014; Peng, 2012; Vecchi & Brennan, 2022) and have a dominant Merger and Acquisition (M&A) mode of entry to acquire these assets (Meyer et al, 2014; Vecchi & Brennan, 2022).…”

Section: Introductionmentioning

confidence: 99%

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A Revisit of Motives for Chinese Outward Foreign Direct Investment: The Role of the Institution in Host Countries

et al. 2022

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This study explores how the institution of the host countries affects the natural resource-seeking and strategic asset-seeking motives of the Chinese outward foreign direct investment. Using the system GMM estimation method and data of the Chinese outward foreign direct investment during the period from 2003 to 2020, the study shows that the search for strategic assets by the Chinese outward foreign direct investment is directed toward the host countries with well-established institutions, while the search for natural resources is driven by poor institutions of the host countries. Findings from this study provide empirical evidence for policymakers to formulate appropriate foreign investment policies given the dynamics of Chinese foreign direct investment worldwide.

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Section: Hypothesis Developmentmentioning

confidence: 80%

Section: Theory and Hypothesis Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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A Revisit of Motives for Chinese Outward Foreign Direct Investment: The Role of the Institution in Host Countries

et al. 2022

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“…3 As an important economic activity, market-seeking OFDI activities can promote domestic economic growth by occupying market share and forming market barriers in the host country. Although this investment has played an essential role in past economic development, it also contributed to environmental pollution in the current economic stage (Christofi et al 2022 ; Wadhwa and Reddy 2011 ). The technology mechanism process.…”

Section: Resultsmentioning

confidence: 99%

The role of OFDI in home-country pollution: insights from LMDI and 3SLS approaches

Liu

2023

Environ Sci Pollut Res

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Under the global climate crisis, harnessing investment for sustainable development is a practical and effective measure for international society. Based on the logarithmic mean Divisia index (LMDI) decomposition and three-stage least squares (3SLS) structural approaches, this study explores the home-country pollution reduction effect of Chinese OFDI activities using the city-level panel data from 2007 to 2019. The findings of this study indicate that (1) China has made a remarkable achievement in PM2.5 pollution reduction and governance, especially from the year 2012. (2) The OFDI activities can significantly decrease the home-country PM 2.5 pollution. With every 1% increase in OFDI flows, the overall pollution level will decrease by 0.76%. (3) Compared with the scale mechanism, the technology and composition mechanism effects of OFDI flows are more evident in addressing the home-country PM 2.5 pollution. With several related policy implications, this study may fill the lacuna of how to play the role of OFDI activities in the home country, thus promoting sustainable development in the next stage.

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“…The critical influence of the differences in institutional regulation, norms, and cognition between the home country and the host country on an enterprise's OFDI entry mode decision-making process cannot be ignored [33]. Although institutional differences will affect the OFDI entry mode choice of an enterprise, when enterprises make investment decisions, national policies can compensate for institutional deficiencies [34].…”

Section: Introductionmentioning

confidence: 99%

Institutional Differences and the Choice of Outward Foreign Direct Investment Mode under the “Belt and Road” Initiative: Experience Analysis Based on China’s Manufacturing Enterprises

Xie

Yin

2023

Sustainability

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Based on 1692 outward foreign direct investment (OFDI) events of 735 A-share listed companies in China’s manufacturing industry from 2010 to 2019, this paper empirically examines the effect of investment motivation and the impact of institutional differences between China and the host country on the choice of OFDI entry mode; the paper also investigates the moderating effect of the “Belt and Road” Initiative (BRI) on Chinese manufacturing enterprises (CMEs) through use of the logit model. The empirical results show that, with greater institutional differences, CMEs become more inclined to choose cross-border mergers and acquisitions (M&A). Furthermore, a positive moderating effect of resource-seeking motivation on the choice of M&A OFDI by CMEs is observed. The signing of the “Belt and Road” cooperation document positively moderates institutional differences in promoting CMEs—especially state-owned CMEs—to choose the M&A mode. The “Belt and Road” Initiative provides an efficient supply system for OFDI by CMEs. This study enriches and extends existing institutional theories and provides suggestions for the promotion of the geopolitical pattern and international cooperation regarding the “Belt and Road” Initiative.

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Exploring the role of institutions in Chinese OFDI: a systematic review and integrative framework

Cited by 21 publications

References 102 publications

A Revisit of Motives for Chinese Outward Foreign Direct Investment: The Role of the Institution in Host Countries

A Revisit of Motives for Chinese Outward Foreign Direct Investment: The Role of the Institution in Host Countries

The role of OFDI in home-country pollution: insights from LMDI and 3SLS approaches

Institutional Differences and the Choice of Outward Foreign Direct Investment Mode under the “Belt and Road” Initiative: Experience Analysis Based on China’s Manufacturing Enterprises

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