scholarly journals Natural Resources and Foreign Direct Investment in Africa: Evidence from Chinese Firms

2020 ◽  
Vol 12 (22) ◽  
pp. 9616
Author(s):  
Yan Chen ◽  
Ruirui Zhai ◽  
Kevin H. Zhang
Keyword(s):  
Foreign Direct Investment ◽  
Natural Resources ◽  
Direct Investment ◽  
Chinese Government ◽  
Outward Foreign Direct Investment ◽  
The West ◽  
Testing Hypotheses ◽  
Poor Countries ◽  
Chinese Investment

The rise of China’s outward foreign direct investment (OFDI) in Africa has promoted the continent’s economic growth but generated controversy in the West. What drives Chinese investment in the continent with abundant natural resources but poor institutions/governance? While the topic is important, studies on the issue in the literature have been limited. This paper attempts to close the gap by testing hypotheses of the role of resources and institutions with panel data in 2003–2013. Estimates suggest that the Chinese investment is not biased toward resource-rich and institution-poor countries but similar to Western investment, and China’s OFDI is largely profit-driven, just like investors from other countries. Institutional supports from the Chinese government, however, seems to be important to China’s OFDI in Africa.

Economic Policy Uncertainty, Bilateral Investment Treaties, and Chinese Outward Foreign Direct Investment

2021 ◽  
Vol 94 (3) ◽  
pp. 519-557
Author(s):  
Yue Lu ◽  
Linghui Wu ◽  
Ka Zeng
Keyword(s):  
Economic Policy ◽  
Foreign Direct Investment ◽  
Host Country ◽  
Direct Investment ◽  
Policy Uncertainty ◽  
Outward Foreign Direct Investment ◽  
Bilateral Investment Treaties ◽  
Economic Policy Uncertainty ◽  
Chinese Investment ◽  
Investment Treaties

This paper examines the effect of bilateral investment treaties (BITs) in promoting Chinese outward foreign direct investment (COFDI) in the presence of rising economic policy uncertainty in China's partner countries. We postulate that the signing of BITs should help stimulate COFDI because the treaties send a credible signal to foreign investors about the host country's intent to protect Chinese investment, and make it more difficult for the host country to violate its treaty obligations. BITs that contain rigorous investment protection and liberalization provisions, in particular, should be more likely to encourage COFDI as they directly influence Chinese investors' expectations about the stability, predictability, and security of the host market. However, while BITs generally promote COFDI, host country economic policy uncertainty may also limit their effectiveness. This is because uncertainty tends to undermine investor confidence, trigger capital flows from high- to low-risk countries, and dampen commercial activities. Poisson pseudo-maximum likelihood (PPML) estimation models of the determinants of COFDI to 188 countries between 2003 and 2017 lend substantial support to our conjectures.

The Politics of Chinese Foreign Direct Investment in the USA

2019 ◽  
Vol 55 (2) ◽  
pp. 254-272 ◽  
Author(s):  
Kelan (Lilly) Lu ◽  
Glen Biglaiser
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Chinese Firms ◽  
Chinese Investment ◽  
Greenfield Investments ◽  
The Us ◽  
The Usa ◽  
Chinese Foreign Direct Investment ◽  
Subnational Analysis

Although recently Chinese investment in the USA has grown exponentially, it has not flowed equally among the US states. Controlling for popular explanations in the foreign direct investment literature, we carry out subnational analysis to assess the determinants of Chinese investment in the USA. Using a panel dataset for all states from 2006 to 2016, we find that Chinese firms are more attracted to states where Republican governors hold office. Republican-governed states particularly attract greenfield investments from Chinese firms. However, we also find that US national security concerns and Chinese goals appear to affect investment flows in high-technology states, limiting the role of partisanship. Our results indicate that it is too soon to dismiss the importance of politics on foreign direct investment.

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