IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2024-06-31.html
   My bibliography  Save this article

Risk and Benefit Analysis of China’s Foreign Direct Investment in the Energy Sector: Case Study of the Belt and Road Initiative

Author

Listed:
  • Erika Kovalova

    (Department of Economics, Faculty of Operation and Economics of Transport, University of Zilina, Zilina, Slovakia)

  • Lukas Vartiak

    (Faculty of Social and Economic Science, Institute of Mediamatics, Comenius University in Bratislava, Bratislava, Slovakia)

Abstract

Since 2011, China has been the world's largest energy consumer. The industrial sector uses two-thirds of the energy consumed in China. The main reason for investment in energy is that China is a net importer of energy, especially oil. The impact of Chinese foreign investments and the energy sector, which is the largest of the individual sectors, are the main subjects of the analysis of the presented paper. In the paper, we used the WoS viewer program to perform a bibliometric analysis of authors, countries, and keywords that deal with FDI. Subsequently, we used various scientific methods, such as the method of observation, method analysis, synthesis, comparison, exploration and explanation, to analyse Chinese investments that flow into multiple sectors worldwide, but especially into the countries participating in the Belt and Road Initiative and into the energy sector from 2013 to the present. As part of the Belt and Road Initiative, China invests in various projects in the form of "loans" and, in many cases, creates debt traps that allow China to seize the assets of participating countries. In this paper, we focused on the energy sector and its development so far within the given initiative, and we also defined what the initiative should focus on within renewable resources. China's energy investments include oil, hydropower, alternative energy, natural gas, and coal. The sharp drop in Chinese investment after 2019 was caused by the COVID-19 pandemic. To conclude, although energy has remained China's primary sector for investment within the BRI regions, Chinese capital has gradually diversified into sectors such as transportation, real estate, technology and innovation, and tourism.

Suggested Citation

  • Erika Kovalova & Lukas Vartiak, 2024. "Risk and Benefit Analysis of China’s Foreign Direct Investment in the Energy Sector: Case Study of the Belt and Road Initiative," International Journal of Economics and Financial Issues, Econjournals, vol. 14(6), pages 283-290, October.
    • Handle: RePEc:eco:journ1:2024-06-31
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijefi/article/download/17210/8353
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijefi/article/view/17210
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Qing Xie & Hua Yin, 2023. "Institutional Differences and the Choice of Outward Foreign Direct Investment Mode under the “Belt and Road” Initiative: Experience Analysis Based on China’s Manufacturing Enterprises," Sustainability, MDPI, vol. 15(9), pages 1-26, April.
    2. Dunning, John H., 2000. "The eclectic paradigm as an envelope for economic and business theories of MNE activity," International Business Review, Elsevier, vol. 9(2), pages 163-190, April.
    3. Yiqi Yuan & May Tan-Mullins, 2023. "An Innovative Approach for Energy Transition in China? Chinese National Hydrogen Policies from 2001 to 2020," Sustainability, MDPI, vol. 15(2), pages 1-24, January.
    4. Abdul Rauf & Ilhan Ozturk & Fayyaz Ahmad & Khurram Shehzad & Abbas Ali Chandiao & Muhammad Irfan & Saira Abid & Li Jinkai, 2021. "Do Tourism Development, Energy Consumption and Transportation Demolish Sustainable Environments? Evidence from Chinese Provinces," Sustainability, MDPI, vol. 13(22), pages 1-23, November.
    5. Hee-sung Bae, 2020. "The Relationships between Orientation, Collaboration and Performance for Supply Chain Management of Korean FDI Firms for Sustainable Growth," Sustainability, MDPI, vol. 12(24), pages 1-17, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Samad, Abdul & Masih, Mansur, 2018. "Does institutional quality matter in attracting foreign direct investment? the case of Ethiopia based on ARDL approach," MPRA Paper 108493, University Library of Munich, Germany.
    2. Arvanitis, Spyros & Hollenstein, Heinz & Stucki, Tobias, 2016. "Does the explanatory power of the OLI approach differ among sectors and business functions? Evidence from firm-level data," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 10, pages 1-46.
    3. Keyan Lai, 2021. "National security and FDI policy ambiguity: A commentary," Journal of International Business Policy, Palgrave Macmillan, vol. 4(4), pages 496-505, December.
    4. Yung-Heng Lee & Yann-Haur Huang & Mei-Jane Chan, 2009. "An Empirical Study Of Wholly-Owned Subsidiaries And Joint Ventures For Entry Into China Markets," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 3(2), pages 9-22.
    5. CĂLIN Adrian Cantemir & POPOVICI Oana Cristina, 2015. "The Effects of Enhancing Competitiveness on FDI Inflows in CEE Countries," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 01, March.
    6. Reinhold Decker & Xuemin Zhao, 2004. "SMEs' Choice of Foreign Market Entry Mode: A Normative Approach," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 3(3), pages 181-200, December.
    7. Martin Bohl & Frank McDonald & Heinz-Josef Tuselmann & Svitlana Voronkova & Paul Windrum, 2011. "The German model of capitalism and the persistence of outward foreign direct investment: evidence from German manufacturing industries," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(2), pages 119-125.
    8. Renato A. Orozco Pereira & Ben Derudder, 2010. "Determinants of Dynamics in the World City Network, 2000-2004," Urban Studies, Urban Studies Journal Limited, vol. 47(9), pages 1949-1967, August.
    9. Mariam Camarero & Sergi Moliner & Cecilio Tamarit, 2021. "Is there a euro effect in the drivers of US FDI? New evidence using Bayesian model averaging techniques," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(4), pages 881-926, November.
    10. Filimon Stremtan & Silvia - Stefania Mihalache & Valeria Pioras, 2009. "On The Internationalization Of The Firms - From Theory To Practice," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(11), pages 1-48.
    11. Ravi Chinta & Mee-Shew Cheung & Nejat Capar, 2015. "Double Whammy or Double Advantage: ¡°Foreignness¡± and ¡°Newness¡± as Determinants of Success in International Business," Journal of Management and Strategy, Journal of Management and Strategy, Sciedu Press, vol. 6(1), pages 76-87, February.
    12. Simplice Asongu & Uduak S. Akpan & Salisu R. Isihak, 2018. "Determinants of foreign direct investment in fast-growing economies: evidence from the BRICS and MINT countries," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 4(1), pages 1-17, December.
    13. Feng, Yanchao & Sabir, Saeed Ahmad & Quddus, Abdul & Wang, Jianxin & Abbas, Shujaat, 2024. "Do the grey clouds of geopolitical risk and political globalization exacerbate environmental degradation? Evidence from resource-rich countries," Resources Policy, Elsevier, vol. 89(C).
    14. Gaffney, Nolan & Cooper, Danielle & Kedia, Ben & Clampit, Jack, 2014. "Institutional transitions, global mindset, and EMNE internationalization," European Management Journal, Elsevier, vol. 32(3), pages 383-391.
    15. Cuervo-Cazurra, Alvaro, 2007. "Sequence of value-added activities in the multinationalization of developing country firms," Journal of International Management, Elsevier, vol. 13(3), pages 258-277, September.
    16. Asongu, Simplice & Nwachukwu, Jacinta, 2015. "Drivers of FDI in Fast Growing Developing Countries: Evidence from Bundling and Unbundling Governance," MPRA Paper 67294, University Library of Munich, Germany.
    17. Christos N. Pitelis, 2011. "Foreign Direct Investment and Economic Integration," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume III, chapter 1, Edward Elgar Publishing.
    18. Valle, Sandra & García, Francisco & Avella, Lucía, 2015. "Offshoring Intermediate Manufacturing: Boost or Hindrance to Firm Innovation?," Journal of International Management, Elsevier, vol. 21(2), pages 117-134.
    19. Chris Wagner, 2020. "Deducing a state-of-the-art presentation of the Eclectic Paradigm from four decades of development: a systematic literature review," Management Review Quarterly, Springer, vol. 70(1), pages 51-96, February.
    20. Giarratana, Marco S. & Cesaroni, Fabrizio, 2010. "US market entry by Spanish pharmaceutical firms," DEE - Working Papers. Business Economics. WB wb101103, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2024-06-31. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.