scholarly journals Investing Overseas Without Moving Factories Abroad: The Case of Chinese Outward Direct Investment

2013 ◽  
Vol 30 (1) ◽  
pp. 85-107 ◽  
Author(s):  
Yiping Huang ◽  
Bijun Wang
Keyword(s):  
Direct Investment ◽  
Early Stage ◽  
Cost Advantage ◽  
Significant Cost ◽  
Firm Level ◽  
Manufacturing Enterprises ◽  
Level Data ◽  
Firm Level Data ◽  
Strategic Assets ◽  
Outward Direct Investment

Chinese outward direct investment (ODI) is unique in the sense that it starts in the early stage of economic development and does not move factories overseas. Empirical analyses using firm-level data confirm that the main purpose of Chinese ODI is to strengthen domestic production and productivity by acquiring strategic assets overseas. This Chinese style of ODI, which is different from Japanese efficiency-seeking ODI or American market-seeking ODI, is mainly underscored by significant cost advantage and abundant foreign exchange. We suggest that there might be a life cycle of ODI, which evolves from the Chinese style to the Japanese style and then to the American style as the economy develops. Following this proposition, we expect a major wave of ODI by Chinese small-sized and medium-sized manufacturing enterprises in the coming decade.

scholarly journals Exceptional performance of multinational suppliers: theory and evidence

2020 ◽  
Author(s):  
Van Pham ◽  
Alan Woodland ◽  
Mauro Caselli
Keyword(s):  
Empirical Analysis ◽  
Direct Investment ◽  
Labour Productivity ◽  
Firm Level ◽  
Level Data ◽  
Firm Level Data ◽  
Ex Ante ◽  
Theoretical Predictions ◽  
Set Up ◽  
The Empirical Analysis

AbstractThis paper focuses on an unexamined area of trade—the behaviour of heterogeneous intermediate suppliers facing final producers of different ability and pursuing different strategies. To inform our empirical analysis, we develop a theoretical model to analyse the choice of an intermediate supplier between selling to domestic producers, selling to multinational producers and/or exporting to foreign producers. The model’s predictions are: (i) sufficiently productive firms self-select into supplying to multinationals or exporting, while the most productive firms pursue both strategies, and (ii) the order of preferred strategies between supplying to multinationals and exporting depends on foreign direct investment inflows and export set-up costs. The paper uses firm-level data with rare information about multinational suppliers from 29 countries in Europe and Central Asia in 2002 and 2005 to test these theoretical predictions. The empirical analysis confirms both of our model’s predictions. Moreover, it suggests that multinational suppliers are more likely to have higher required levels of ex-ante labour productivity than exporters, implying that exporting is easier and a more popular choice for firms.

Does FDI Mode of Entry Matter for Economic Developments of a Host Country? The Case of Korea

2006 ◽  
Vol 5 (3) ◽  
pp. 171-185
Author(s):  
Seong-Bong Lee ◽  
Mikyung Yun
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Classification Scheme ◽  
Ongoing Debate ◽  
Firm Level ◽  
Mode Of Entry ◽  
Level Data ◽  
Firm Level Data ◽  
Economic Developments ◽  
Level Performance

There is an ongoing debate on whether benefits of foreign direct investment (FDI) differ depending on the modes of FDI entry. This paper examines this debate using firm-level data on FDI in Korea. The paper adopts a new, more accurate classification scheme than the current official classification system and finds that there is little difference in firm-level performance according to FDI mode of entry. The paper thus argues against any provision of preferential incentives based on modes of entry.

Determinants and effects of foreign direct investment: evidence from German firm-level data

2005 ◽  
Vol 20 (41) ◽  
pp. 52-110 ◽  
Author(s):  
C. M. Buch ◽  
J. Kleinert ◽  
A. Lipponer ◽  
F. Toubal ◽  
R. Baldwin
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
German Firm ◽  
Firm Level ◽  
Level Data ◽  
Firm Level Data

scholarly journals Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages

2004 ◽  
Vol 94 (3) ◽  
pp. 605-627 ◽  
Author(s):  
Beata Smarzynska Javorcik
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Foreign Ownership ◽  
Foreign Investments ◽  
Firm Level ◽  
Productivity Spillovers ◽  
Level Data ◽  
Firm Level Data ◽  
Foreign Affiliates ◽  
Backward Linkages

Many countries strive to attract foreign direct investment (FDI) hoping that knowledge brought by multinationals will spill over to domestic industries and increase their productivity. In contrast with earlier literature that failed to find positive intraindustry spillovers from FDI, this study focuses on effects operating across industries. The analysis, based on firm-level data from Lithuania, produces evidence consistent with positive productivity spillovers from FDI taking place through contacts between foreign affiliates and their local suppliers in upstream sectors. The data indicate that spillovers are associated with projects with shared domestic and foreign ownership but not with fully owned foreign investments.

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