BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 24/2014:
The impact of outward FDI on the performance of Chinese multinationals
Claudio Cozza ()
, Roberta Rabellotti ()
and Marco Sanfilippo ()
Abstract: Using a new firm-level database, EMENDATA, this paper
investigates the effects on Chinese multinational enterprises of Outward
FDI (OFDI) into advanced European countries. Propensity score matching is
combined with a difference-in-difference estimator to reduce the problems
of self-selection of treated firms in foreign markets and to eliminate
time-invariant and unobservable differences between those firms and the
controls. The results provide robust evidence in support of the view that
China’s OFDI had so far a positive impact on domestic activities in
enhancing firms’ productivity and scales of operation, as measured by
assets, sales and employment. Distinguishing among such investments on the
basis of entry mode shows that acquisitions facilitate early access to
intangible assets but are detrimental to financial performance, whereas
greenfield investments have a positive impact on the scale and productivity
of Chinese investors.
Keywords: outward FDI; reverse spillovers; performance; Chinese multinationals; (follow links to similar papers)
JEL-Codes: F49; (follow links to similar papers)
32 pages, December 4, 2014
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