The Impact of Outward FDI on the Performance of Chinese Multinationals

32 Pages Posted: 20 May 2016

See all articles by Claudio Cozza

Claudio Cozza

Università degli Studi di Napoli Parthenope

Roberta Rabellotti

University of Pavia

Marco Sanfilippo

University of Antwerp - Institute of Development Policy and Management

Date Written: 2014

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. Publication keywords: outward FDI, reverse spillovers, performance, Chinese multinationals

Keywords: F45

Suggested Citation

Cozza, Claudio and Rabellotti, Roberta and Sanfilippo, Marco, The Impact of Outward FDI on the Performance of Chinese Multinationals (2014). BOFIT Discussion Paper No. 24/2014, Available at SSRN: https://ssrn.com/abstract=2780912 or http://dx.doi.org/10.2139/ssrn.2780912

Claudio Cozza (Contact Author)

Università degli Studi di Napoli Parthenope ( email )

Naples
Italy

Roberta Rabellotti

University of Pavia ( email )

Corso Strada Nuova, 65
27100 Pavia, 27100
Italy

Marco Sanfilippo

University of Antwerp - Institute of Development Policy and Management ( email )

City campus building S
Lange Sint Annastraat 7
Antwerp, 2000
Belgium

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