A panel data analysis of locational determinants of Chinese and Indian outward foreign direct investment

Guney, Yilmaz; Duanmu, Jing Lin

Abstract

The upsurge of Chinese and Indian outward foreign direct investment (FDI) raises an unanswered question about locational determinants of direct investment from the two countries. Using an unbalanced bilateral FDI database, we find that Chinese and Indian FDI are attracted to countries with large market size, low GDP growth, high volumes of imports from China or India, and low corporate tax rates. We also find important differences between China and India. While Chinese FDI is drawn to countries with open economic regimes, depreciated host currencies, better institutional environments, and English speaking status, none of these factors are important for Indian FDI. Chinese FDI is also deterred by geographic distance and OCED membership. However, neither of these has any impact on Indian FDI. © 2009, Emerald Group Publishing Limited

Citation

Guney, Y., & Duanmu, J. L. (2009). A panel data analysis of locational determinants of Chinese and Indian outward foreign direct investment. Journal of Asia Business Studies, 3(2), 1-15. https://doi.org/10.1108/15587890980001512

• Journal Article Type: Review
• Publication Date: May 21, 2009
• Deposit Date: Nov 13, 2014
• Journal: Journal of Asia business studies
• Print ISSN: 1558-7894
• Electronic ISSN: 1559-2243
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• Volume: 3
• Issue: 2
• Pages: 1-15
• DOI: https://doi.org/10.1108/15587890980001512
• Keywords: Strategy and Management; Business and International Management; General Economics, Econometrics and Finance
• Public URL: https://hull-repository.worktribe.com/output/463794
• Publisher URL: https://www.emeraldinsight.com/doi/abs/10.1108/15587890980001512