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Multinational investment projects in the petrochemical industry in China

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  • Todeva, Emanuela
  • Fu, Yan

Abstract

Purpose – The paper discusses the new concept of “Multinational Investment Projects” (MIPs) and its application in the context of international business operations in China. The petrochemical industry in China is used as the industrial context in which we investigate the interplay between the Chinese government, which encourages growth and investment activities in the sector, and the multinational petrochemical firms competing for global market share in this sector. Design/methodology/approach – The paper investigates the nature of the petrochemical value chain and the investment activities in all of its segments. Using an originally created database of the top 180 MIPs in the petrochemical industry in China and additional context information the business environment in China, the paper reviews the investment strategies of multinational petrochemical corporations, and discusses their strategic choices for mode of entry in China, geographic location and location within the value chain. Findings – The overview of MIPs in the Chinese petrochemical industry confirms the theoretical expectations of the critical impact of Chinese Government policies. The paper explains the emerging shape of international competition in this sector of the Chinese economy. Originality/value – The main contributions of this paper are the new conceptual framework for analysis of the drivers for strategic investment choices, the assembly of a database with the top 180 MIPs in the petrochemical industry in China, and the analysis of the relationships between the regional endowments, concentration of value-chain activities and location choices by multinational firms from different countries of origin. The results demonstrate the factors that drive growth in a knowledge-, technology- and capital-intensive sector.

Suggested Citation

  • Todeva, Emanuela & Fu, Yan, 2010. "Multinational investment projects in the petrochemical industry in China," MPRA Paper 67615, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:67615
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    References listed on IDEAS

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    More about this item

    Keywords

    China; Petrochemicals industry; International investments;
    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
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L7 - Industrial Organization - - Industry Studies: Primary Products and Construction
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels

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