- New Horizons in International Business series
Chapter 6: Conclusion
Foreign direct investments from mainland China have constantly grown since 1978 but have surged since 2003. This research has analysed China’s OFDI and attempted to identify to what extent the determinants of China’s OFDI and the investment strategies of Chinese firms are influenced by the institutional environment the firms are embedded in and the extent to which international business theories can explain this phenomenon. We find that standard international business theory and the general determinants of FDI can explain the phenomenon well. However, the institutional environment at home and overseas also contributes significantly for the increase and spatial spread of China’s OFDI. Thus, the contributions of this research are mainly threefold: (i) it contributes to general understanding about the applications of institutional theory to international business and to outbound investment in particular, and is illustrated here with an analysis of China’s OFDI during times of institutional change at home and abroad; (ii) a special application of the internalisation theory by Buckley and Casson (1976) is suggested that explains OFDI from mainland China; and (iii) new robust measurements have been introduced that can further inform international business research. The contributions are discussed and summarised below: 6.1 ADVANCING THE UNDERSTANDING OF CHINA’S OFDI Several determinants of China’s OFDI have been identified by applying cross-sectional analyses. The determinants differ by level of economic development of the host country and over time. The absolute market size is a determinant of Chinese investment in OECD countries while it is the relative market size (GDP per...
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