Cookies?
Library Header Image
LSE Research Online LSE Library Services

Doses the belt and road initiative reshape China's outward foreign direct investment in Asean?: Shifting motives of state-owned and private-owned enterprises

Shi, Jin, Hu, Xiaohui, Li, Yunxiong and Feng, Tao (2021) Doses the belt and road initiative reshape China's outward foreign direct investment in Asean?: Shifting motives of state-owned and private-owned enterprises. Singapore Economic Review, 66 (1). pp. 161-183. ISSN 0217-5908

Full text not available from this repository.

Identification Number: 10.1142/S0217590819500772

Abstract

In recent years, China has been increasingly witnessed as a major global outward investor, especially since the launch of the Belt and Road Initiative (BRI) in 2013. The question of whether and if yes how the BRI reshapes firm outward investment motives remains under-researched. Using a project-level database of China's Outward Direct Investment from the Ministry of Commerce from 2010 to 2015, this paper investigates the changing investment motives of state-owned and private-owned enterprises (SOEs and POEs) before and after the implementation of the BRI in two periods, namely 2010-2013 and 2014-2015. Our conditional logit models show that (1) market-seeking is one of the key motives for both POEs and SOEs; (2) POEs pursued natural resources in ASEAN based on geographical and relational proximity in the pre-BRI period while SOEs are directed to exploit natural resources in ASEAN besides remoter destinations after the launch of the BRI; (3) POEs are risk-taking in both periods, which runs counter to conventional expectations. This can be explained by the long-term investment tradition of POEs in ASEAN in which POEs are attracted predominantly by socio-economic factors and often less sensitive to variegated host institutions among ASEAN countries and (4) the BRI promotes Chinese OFDI in ASEAN through increased senior leader visits and enhanced diplomatic relations.

Item Type: Article
Additional Information: Funding Information: Natural resources in the host country also have a positive effect on Chinese OFDI. An increase in the ratio of fuel, ore and metal exports to merchandise exports by 10% would raise the odds ratio of a particular host country in attracting an investment project from China by 6.28%.9 However, its coefficients are significant for POEs in 2010–2013 and SOEs in 2014–2015. It might be argued that in the 2010–2013 pre-BRI period ASEAN was not targeted as a key destination by the Chinese government for resource seeking OFDI. SOEs thus were designated by the government to exploit natural resources in remoter destinations such as Mideast, Africa, Australia and Latin America. This geographical distribution is supported by the project-level database of China’s OFDI from the Ministry of Commerce in 2010–2013, which listed all the countries/regions in which Publisher Copyright: © 2019 World Scientific Publishing Company.
Divisions: Geography & Environment
Date Deposited: 03 May 2024 11:54
Last Modified: 19 Jul 2024 22:33
URI: http://eprints.lse.ac.uk/id/eprint/122896

Actions (login required)

View Item View Item