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Location determinants of China's outward foreign direct investment

Yao, S., Zhang, F., Wang, P. and Luo, D. (2017) Location determinants of China's outward foreign direct investment. China & World Economy, 25 (6). pp. 1-27. ISSN 1671-2234

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To link to this item DOI: 10.1111/cwe.12218


Compared to inward foreign direct investment, outward foreign direct investment (OFDI) from China is a relatively new phenomenon. However, the volume of China's OFDI increased rapidly from 2004. There has been an increasing amount of literature on the motivations of China's OFDI, but few studies have focused on its location determinants. The present paper aims to fill this gap in the literature by focusing on two important location factors, natural resources and technology, which are the most important determinants of China's OFDI. We use a large panel dataset comprising 132 countries over the period 1991–2009 and the Tobit as well as the Heckman models to establish the relationship between the two location factors and China's OFDI. The empirical results suggest that although China's OFDI has been driven by the country's desire for a secure supply of natural resources and to attain advanced technology from the developed world, China's technology is also a critical attraction for the host developing economies.

Item Type:Article
Divisions:Henley Business School > Business Informatics, Systems and Accounting
ID Code:73920
Uncontrolled Keywords:General Economics, Econometrics and Finance

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