The Formation of Chinese Outward FDI Strategy in Africa

Author(s):  
Yue Xu
Keyword(s):  
2018 ◽  
Vol 18 (3) ◽  
pp. 86-103

The effect of cultural distance (CD) on the entry mode choice (EMC) has been intensively studied but the empirical results are mixed. This study adopts the strategic fit perspective to examine how firms’ strategic motives and technological ownerships may influence the EMC in face of different cultural distances. Analyzing Taiwanese outward FDI cases from 2004 to 2007, this study found that firms entering the culture-distant countries would choose the wholly-owned subsidiary (WOS) mode when emphasizing more about the protection of technological competence than market expansion, or else would choose the joint-venture (JV) mode when the market expansion is prioritized.


The phenomenal story of China’s ‘unprecedented disposition to engage the international legal order’ has been primarily told and examined by political scientists and economists. Since China adopted its ‘open door’ policy in 1978, which altered its development strategy from self-sufficiency to active participation in the world market and aimed at attracting foreign investment to fuel its economic development, the underlying policy for mobilizing inward foreign direct investment (IFDI) remains unchanged to date. With the 1997 launch of the ‘Going Global’ policy, an outward focus regarding foreign investment has been added, to circumvent trade barriers and improve the competitiveness of Chinese firms, typically its state-owned enterprises (SOEs). In order to accommodate inward and outward FDI, China’s participation in the international investment regime has underpinned its efforts to join multi-lateral investment-related legal instruments and conclude international investment agreements (IIAs). China began by selectively concluding bilateral investment treaties (BITs) with developed countries (major capital exporting states to China at that time), signing its first BIT with Sweden in 1982. Despite being a latecomer, over time China’s experience and practice with the international investment regime have allowed it to evolve towards liberalizing its IIAs regime and balancing the duties and benefits associated with IIAs. The book spans a broad spectrum of China’s contemporary international investment law and policy: domestic foreign investment law and reforms, tax policy, bilateral investment treaties, free trade agreements, G20 initiatives, the ‘One Belt One Road’ initiative, international dispute resolution, and inter-regime coordination.


2021 ◽  
pp. 016001762198942
Author(s):  
Zhenshan Yang ◽  
Yinghao Pan ◽  
Dongqi Sun ◽  
Li Ma

The pattern of international capital flows has changed dramatically in the process of globalization. In this study, we argue that human capital (HC) facilitates a region’s reversal from being a net recipient of external resources to being an active contributor in the global market. Using a panel vector autoregressive regression method, we examine the relationships among regional HC, foreign direct investment (FDI), and outward FDI during 2004–2015 in China. Our results show that HC plays a key role in both attracting FDI and generating outward FDI. The findings contribute to research on the dynamic capacity building of regions participating in the global economy, especially strengthening HC for local economies participating in the global economy as either investment recipients or contributors.


2014 ◽  
Vol 05 (03) ◽  
pp. 1440009
Author(s):  
Sasatra Sudsawasd ◽  
Santi Chaisrisawatsuk

Using panel data for 57 countries over the period of 1995–2012, this paper investigates the impact of intellectual property rights (IPR) processes on productivity growth. The IPR processes are decomposed into three stages — innovation process, commercialization process, and protection process. The paper finds that better IPR protection is directly associated with productivity improvements only in developed economies. In addition, the contribution of IPR processes on growth through foreign direct investment (FDI) appears to be quite limited. Only inward FDI in developed countries which creates better innovative capability leads to higher growth. In connection with outward FDI, only the increase in IPR protection and commercialization are proven to improve productivity in the case of developing countries, particularly when the country acts as the investing country.


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