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Outward Foreign Direct Investment Of China’S Banking Sector: Determinants And Motivations

Author

Listed:
  • YUHUA ZHAO

    (School of Economics, Beijing International Studies University, Beijing 100024, P. R. China)

  • NILUFER OZDEMIR

    (��Department of Economics and Geography, Coggin College of Business, University of North Florida, Jacksonville, Florida 32224, USA)

  • REN ZHANG

    (��Department of Finance and Economics, McCoy College of Business, Texas State University, San Marcos, Texas 78666, USA)

  • LIAN AN

    (��Department of Economics and Geography, Coggin College of Business, University of North Florida, Jacksonville, Florida 32224, USA)

Abstract

The outward foreign direct investment (OFDI) is vital for the sustainable development of China’s banking sector. This paper examines the location determinants of OFDI by China’s banks during 2003–2015 with a set of negative binomial panel regression models. We show that the OFDI for China’s banking sector generally exhibits market-seeking, resource-seeking and efficiency-seeking motivations. The efficiency-seeking motivation is mostly through the incentive to avert credit risk. The OFDI also tends to flow to economically stable countries. Our results indicate that the Chinese banks’ investment decisions are mainly in line with fundamental theories and are robust for different samples and periods.

Suggested Citation

  • Yuhua Zhao & Nilufer Ozdemir & Ren Zhang & Lian An, 2022. "Outward Foreign Direct Investment Of China’S Banking Sector: Determinants And Motivations," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 67(02), pages 685-707, March.
    • Handle: RePEc:wsi:serxxx:v:67:y:2022:i:02:n:s0217590821500594
    DOI: 10.1142/S0217590821500594
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    Cited by:

    1. Lin, Kang & Tian, Kailan & Gao, Xiang & Zhao, Yu & Yang, Cuihong, 2024. "Responses of China's cross-border investors to domestic environmental regulations," Energy Economics, Elsevier, vol. 131(C).

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