Chinese OFDI to Germany in the Environmental Industries: A Multiple Case Study

Abstract

Purpose

Chinese foreign direct investments (FDI) to developed countries, such as Germany, seems to follow unique rules, which are different to traditional international business (IB) practices in terms of entry modes, speed of internationalization, and target countries. To shed light on these unique rules, we analyze motivation and location choices of FDI from China to Germany by describing a sample of five companies from the environmental industry.

Methodology/approach

A multiple case study research design is adopted. The study is based on five Chinese companies investing in Germany in the environmental industry through FDI (Greenfield Investment and Merger and Acquisition). Chinese managers were interviewed on the basis of semi-structured questionnaires.

Findings

According to the main findings from the interviews, when investing in Germany, managers take into account a series of factors. Chinese firms go global for traditional motives such as market-seeking purposes and with the aim of improving their production process through skills and know-how acquisition. Additional motives, such as labor cost and fiscal incentives are not considered relevant as factors for internationalizing. Entry mode choices are mainly driven by legal factors in the environmental industry.

Originality/value

The analysis is conducted at industry level with the aim to contextualize the results within the environmental sector. The case studies are focused on Chinese investments in Germany.

Citation

Vaccarini, K., Spigarelli, F., Lattemann, C., Salvatelli, F. and Tavoletti, E. (2016), "Chinese OFDI to Germany in the Environmental Industries: A Multiple Case Study", Spigarelli, F., Curran, L. and Arteconi, A. (Ed.) China and Europe’s Partnership for a More Sustainable World, Emerald Group Publishing Limited, Leeds, pp. 113-127. https://doi.org/10.1108/978-1-78635-332-020161026