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Firm heterogeneity and location choice of Chinese firms in Latin America and the Caribbean: Corporate ownership, strategic motives and host country institutions

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  • Lin, Yue

Abstract

China's ODI in Latin America and the Caribbean is entering into the second phase with diversification of economic actors and industries of investment. This paper extracts the approved projects by the Chinese Ministry of Commerce from its online database between 2003–2012, and fits a random effect negative binomial regression model. Our statistical estimates on the one hand confirm some of the previous findings on the disparity between Chinese public and private investors in their ODI motivations and perception of risks, on the other hand find that host country institutions are not purely ownership specific, but also contingent on industries and activities in which firms tend to invest. The direction of institutional effect is not consistent across sectors and firm types. The revealed complexity of China's ODI in Latin America and the Caribbean suggests a multi-level framework in further research, which treats Chinese transnational firms as endogenously heterogeneous beyond the dichotomous categorisation according to corporate ownership.

Suggested Citation

  • Lin, Yue, 2015. "Firm heterogeneity and location choice of Chinese firms in Latin America and the Caribbean: Corporate ownership, strategic motives and host country institutions," China Economic Review, Elsevier, vol. 34(C), pages 274-292.
    • Handle: RePEc:eee:chieco:v:34:y:2015:i:c:p:274-292
    DOI: 10.1016/j.chieco.2015.03.001
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    More about this item

    Keywords

    China; Latin America; Foreign direct investment; Corporate ownership;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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