– This paper aims to investigate the determinants of foreign direct investment (FDI) by Chinese multinational enterprises (MNEs) over the period 1985-2011.
Abstract
Purpose
This paper aims to investigate the determinants of foreign direct investment (FDI) by Chinese multinational enterprises (MNEs) over the period 1985-2011.
Design/methodology/approach
This paper estimates a single equation model which uses long-run co-integration analysis and short-run analysis (error correction mechanism). This paper depends on annual data collected from the World Bank and the General Authority for Investment & Free zones Information & Decision Support Division for the period 1985-2011.
Findings
This paper found a conventional result for market size. The author infers from the significant role played by Egyptian natural resource endowments that the institutional environment has strongly shaped Chinese FDI, leading to significant natural resources-seeking FDI. The author also finds that policy liberalisation in China has had a positive influence in stimulating Chinese FDI in Egypt.
Originality/value
Despite this model being used to estimate the determinants of FDI by Chinese MNEs in several countries, this is the first time it is being used in Egypt using a time-series analysis. Moreover, this model which has been used in this paper uses both long-run and short-run analyses.
Details
Keywords
Rania S. Miniesy and Eman Elish
This paper aims to investigate the host country determinants of Chinese Outward FDI (OFDI) and, given these determinants, examines whether Chinese OFDI in MENA is less than…
Abstract
Purpose
This paper aims to investigate the host country determinants of Chinese Outward FDI (OFDI) and, given these determinants, examines whether Chinese OFDI in MENA is less than elsewhere.
Design/methodology/approach
Data for the top 40 Chinese OFDI recipients including seven MENA countries from 2003 to 2012 were obtained. A pooled ordinary least squares estimation technique on the lagged explanatory variables and the lagged dependent variable – flows and stocks alternatively – with robust standard errors was used.
Findings
Chinese OFDI is market, resource and efficiency seeking and is attracted by poor governance. The seven MENA countries seemingly receive significantly less Chinese OFDI flows compared to other countries. However, careful inspection shows that UAE is creating this bias. This maybe because exporting to UAE rather than licensing or FDI seems like the best scenario, or UAE is already satiated with FDI from other countries, or China is waiting for the right time to enter such an FDI-competitive market like that of UAE.
Originality/value
Chinese OFDI is particularly important for MENA because it has a comparative advantage relative to other FDI source countries, and no research so far has investigated if it is less than in other regions, which could provide insights on how to attract it.