Is Chinese outward FDI in MENA little?
Journal of Chinese Economic and Foreign Trade Studies
ISSN: 1754-4408
Article publication date: 6 February 2017
Abstract
Purpose
This paper aims to investigate the host country determinants of Chinese Outward FDI (OFDI) and, given these determinants, examines whether Chinese OFDI in MENA is less than elsewhere.
Design/methodology/approach
Data for the top 40 Chinese OFDI recipients including seven MENA countries from 2003 to 2012 were obtained. A pooled ordinary least squares estimation technique on the lagged explanatory variables and the lagged dependent variable – flows and stocks alternatively – with robust standard errors was used.
Findings
Chinese OFDI is market, resource and efficiency seeking and is attracted by poor governance. The seven MENA countries seemingly receive significantly less Chinese OFDI flows compared to other countries. However, careful inspection shows that UAE is creating this bias. This maybe because exporting to UAE rather than licensing or FDI seems like the best scenario, or UAE is already satiated with FDI from other countries, or China is waiting for the right time to enter such an FDI-competitive market like that of UAE.
Originality/value
Chinese OFDI is particularly important for MENA because it has a comparative advantage relative to other FDI source countries, and no research so far has investigated if it is less than in other regions, which could provide insights on how to attract it.
Keywords
Acknowledgements
The authors would like to thank their colleagues Dr Alaa Abdel Aziz, Dr Hany Elshamy and Mr Hossameldin Ahmed for their help with our econometric enquiries. They would also like to thank Professor John Adams for his constructive comments on the earlier version of this paper. Much appreciation also goes to Professor Bernard Hoekman, the paper discussant, for his very valuable comments and discussion during the authors’ presentation in the 22nd ERF conference. An earlier version of this work was published as an ERF Working Paper Number 1024.
This work was sponsored by the Economic Research Forum (ERF) and has benefited from both financial and intellectual support. The contents and recommendations do not necessarily reflect ERF’s views.
Citation
Miniesy, R.S. and Elish, E. (2017), "Is Chinese outward FDI in MENA little?", Journal of Chinese Economic and Foreign Trade Studies, Vol. 10 No. 1, pp. 19-43. https://doi.org/10.1108/JCEFTS-09-2016-0026
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited