Title: Chinese outward direct investment: a study on macroeconomic determinants

Authors: William X. Wei, Ilan Alon

Addresses: Asia Pacific Management Program, Institute of Asia Pacific Studies, MacEwan School of Business, Grant MacEwan University, RM 5-221H, 10700-104 Avenue, Edmonton, Alberta T5J 4S2, Canada. ' International Business, China Center, Rollins College, 1000 Holt Ave – 2723, Winter Park, Florida 32789, USA

Abstract: On the basis of Dunning|s Investment Development Path (IDP) hypothesis, this paper tests the macroeconomic determinants of Chinese Offshore Direct Investment (ODI) from a home-country perspective. We review the recent firm- and country-level studies on determinants of Chinese ODI. We propose a model and test seven home-country macroeconomic variables as determinants of Chinese ODI. Our results reveal that the macroeconomic variables such as interest rate, exchange rate, import and foreign reserve are important determinants of Chinese outward Foreign Direct Investment (FDI).

Keywords: business; emerging markets; offshore direct investment; outward direct investment; China; FDI; foreign direct investment; Chinese ODI; macroeconomic determinants; empirical analysis; investment development path.

DOI: 10.1504/IJBEM.2010.035663

International Journal of Business and Emerging Markets, 2010 Vol.2 No.4, pp.352 - 369

Published online: 02 Oct 2010 *

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