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The internationalization of Chinese companies What do official statistics tell us about Chinese outward foreign direct investment?

The internationalization of Chinese companies What do official statistics tell us about Chinese... Purpose – The purpose of this paper is to offer a critical perspective on China's official outward foreign direct investment (OFDI) data, commonly used in most research on the internationalization of Chinese companies. Owing to the deficiencies of China's statistical system, official OFDI data leave us with only a limited understanding of the pattern of Chinese OFDI in general and cross‐border mergers and acquisitions (M&As) in particular. Design/methodology/approach – Based on a theoretical discussion of the internationalization of companies, some propositions about the development pattern of Chinese M&As are derived. This study uses the Dealogic database, which covers Chinese cross‐border M&As during the period from January 1999 to May 2007 in order to analyse the development trend, geographical destination, sectoral distribution, and equity participation of Chinese cross‐border M&As. Findings – First, the growth of China's OFDI has not been as fast as expected, while the development of cross‐border M&As has been very impressive. Second, although official OFDI statistics reveal that Asia remains the most important investment destination, our M&A data analysis shows that the developed countries in the West have attracted most Chinese cross‐border M&A investments. Third, in contrast to the official OFDI statistics, our findings reveal a heavy concentration of M&As in mining and manufacturing. Finally, our cross‐border M&A data suggest that Chinese companies predominantly seek high‐level equity participation in the acquired target companies abroad. Originality/value – This paper fills a gap in the study of the development pattern of Chinese cross‐border M&A investments and offers a complementary view and a better understanding of the internationalization of Chinese companies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Chinese Management Studies Emerald Publishing

The internationalization of Chinese companies What do official statistics tell us about Chinese outward foreign direct investment?

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Publisher
Emerald Publishing
Copyright
Copyright © 2009 Emerald Group Publishing Limited. All rights reserved.
ISSN
1750-614X
DOI
10.1108/17506140910946124
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to offer a critical perspective on China's official outward foreign direct investment (OFDI) data, commonly used in most research on the internationalization of Chinese companies. Owing to the deficiencies of China's statistical system, official OFDI data leave us with only a limited understanding of the pattern of Chinese OFDI in general and cross‐border mergers and acquisitions (M&As) in particular. Design/methodology/approach – Based on a theoretical discussion of the internationalization of companies, some propositions about the development pattern of Chinese M&As are derived. This study uses the Dealogic database, which covers Chinese cross‐border M&As during the period from January 1999 to May 2007 in order to analyse the development trend, geographical destination, sectoral distribution, and equity participation of Chinese cross‐border M&As. Findings – First, the growth of China's OFDI has not been as fast as expected, while the development of cross‐border M&As has been very impressive. Second, although official OFDI statistics reveal that Asia remains the most important investment destination, our M&A data analysis shows that the developed countries in the West have attracted most Chinese cross‐border M&A investments. Third, in contrast to the official OFDI statistics, our findings reveal a heavy concentration of M&As in mining and manufacturing. Finally, our cross‐border M&A data suggest that Chinese companies predominantly seek high‐level equity participation in the acquired target companies abroad. Originality/value – This paper fills a gap in the study of the development pattern of Chinese cross‐border M&A investments and offers a complementary view and a better understanding of the internationalization of Chinese companies.

Journal

Chinese Management StudiesEmerald Publishing

Published: Apr 3, 2009

Keywords: International investments; Direct investment; Acquisitions and mergers; Globalization; China

References