TY - JOUR
T1 - Assessing the Scale and Potential of Chinese Investment Overseas: An Econometric Approach
AU - Armstrong, Shiro
PY - 2011
Y1 - 2011
N2 - The recent rise in Chinese outward direct investment (ODI) has significant global implications and impacts on host country policy. The present paper attempts to provide a theoretical basis and to define a robust econometric approach to assess the performance and potential of Chinese ODI. In this paper, foreign direct investment (FDI) performance is estimated using a frontier FDI model to measure how foreign investors, especially China, and the recipients of this direct investment perform relative to a benchmark of potential FDI. The results show that Chinese ODI achieves less of its potential compared with other investors. However, its ODI to Australia has performed much better than investment to other destinations. The results suggest that Chinese policy-makers should look at the pattern of China's ODI and, in light of superior performance in destinations like Australia, adjust policy strategies and institutional arrangements to enhance performance and reduce barriers to Chinese ODI.
AB - The recent rise in Chinese outward direct investment (ODI) has significant global implications and impacts on host country policy. The present paper attempts to provide a theoretical basis and to define a robust econometric approach to assess the performance and potential of Chinese ODI. In this paper, foreign direct investment (FDI) performance is estimated using a frontier FDI model to measure how foreign investors, especially China, and the recipients of this direct investment perform relative to a benchmark of potential FDI. The results show that Chinese ODI achieves less of its potential compared with other investors. However, its ODI to Australia has performed much better than investment to other destinations. The results suggest that Chinese policy-makers should look at the pattern of China's ODI and, in light of superior performance in destinations like Australia, adjust policy strategies and institutional arrangements to enhance performance and reduce barriers to Chinese ODI.
U2 - 10.1111/j.1749-124X.2011.01248.x
DO - 10.1111/j.1749-124X.2011.01248.x
M3 - Article
SN - 1671-2234
VL - 19
SP - 22
EP - 37
JO - China and World Economy
JF - China and World Economy
IS - 4
ER -