Written together with Yun Schüler-Zhou and Margot Schüller. Recently published as chapter 8 of Chinese International Investment by Ilan Alon, Marc Fetscherin and Phillipe Gugler.
Push and Pull Factors for Chinese OFDI in Europe
Yun Schüler-Zhou, Margot Schüller and Magnus BrodThis paper analyses the factors that explain the development and pattern of outward foreign direct investment (OFDI) of Chinese companies in Europe. By applying the concept of institutional and structural push and pull factors we want to show what exactly the Chinese government’s policy guidelines towards investment in the European Union (EU) in terms of countries and sectors are and what kind of incentives the EU countries offer to attract them. The analysis is based on the institutional push factors of Chinese OFDI in the EU, particularly the Countries and Industries for Overseas Investment Guidance Catalogue published by the Chinese government. In order to understand the specific incentives offered by the European Investment Promotion Agencies (IPAs), we conducted a questionnaire survey among the 92 European IPAs in 2009. Similar to the Chinese government’s policy for inward FDI, a bureaucratic tool of guidance has been introduced in order to direct the companies’ investment into specific countries and industries in the EU. To some extent, the government recommendations and the pattern of Chinese OFDI in Europe correspond. However, more research is needed to cover the Chinese OFDI in all of the 27 EU countries in detail. Our analysis of IPA’s policy approach towards Chinese investment showed that Eastern EU countries rely on more complex incentive schemes than the Western EU countries. With the focus on the policy guidelines for OFDI in the EU, an important additional aspect of institutional push factors has been added to the discussion. Furthermore, by analysing the IPA’s incentive schemes, we have introduced a new perspective to the analysis of the pull factors for Chinese OFDI.
Schüler-Zhou, Yun; Schüller, Margot; Brod, Magnus (20120): Push and Pull Factors for Chinese OFDI in Europe, in: Alon, I.und M. Fetscherin and P. Gugler (eds), Chinese International Investment, pp. 157-174. Basingstoke: Palgrave Macmillan.
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