Revisiting the OLI Paradigm: The Institutions, the State, and China's OFDI

34 Pages Posted: 23 Nov 2011  

Hao Liang

Singapore Management University, Lee Kong Chian School of Business; Tilburg University, CentER

Bing Ren

Nankai School of Business

Haikun Zhu

Tilburg University

Date Written: November 23, 2011

Abstract

We propose a modified theoretical framework based on John Dunning’s classical OLI paradigm in the international business literature to analyze Chinese firms’ fast-growing and aggressive outward foreign direct investment (OFDI). In particular, from an institutional perspective, we suggest a 'state-stewardship' view to incorporate state institutions into the OLI paradigm. This paper supplements our earlier work (Ren, Liang, and Zheng, 2011) on identifying the formal institutional determinants of Chinese firms’ OFDI motivations and strategies, by further looking at the impact of direct and indirect policies, and the OFDI state-controlled financial intermediaries. Under our modified OLI framework we also examine the potential concerns on China’s state-backed OFDI and its implication on long-term sustainability.

Keywords: outward foreign direct investment, institutions, state-stewardship view, OLI paradigm

JEL Classification: F230, H810, M480

Suggested Citation

Liang, Hao and Ren, Bing and Zhu, Haikun, Revisiting the OLI Paradigm: The Institutions, the State, and China's OFDI (November 23, 2011). CESifo Working Paper Series No. 3642. Available at SSRN: https://ssrn.com/abstract=1963642

Hao Liang (Contact Author)

Singapore Management University, Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

HOME PAGE: http://business.smu.edu.sg/faculty/profile/130396/LIANG-Hao

Tilburg University, CentER ( email )

Netherlands

Bing Ren

Nankai School of Business ( email )

94 Weijin Road, Nankai District
Tianjin, Tianjin 300071
China

Haikun Zhu

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

Paper statistics

Downloads
172
Rank
142,148
Abstract Views
926