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The internationalization of Chinese companies: what do official statistics tell us abour Chinese outward foreign direct investment?

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Schüller, Margot; Schüler-Zhou, Yun

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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.
Keywords China; enterprise; globalization; internationalization; direct investment; foreign investment; equity participation; economic growth; economic policy; Far East
Classification National Economy; Management Science
Document language English
Publication Year 2009
Page/Pages p. 25-42
Journal Chinese Management Studies, 3 (2009) 1
ISSN 1750-614X
Status Published Version; peer reviewed
Licence Deposit Licence - No Redistribution, No Modifications
This publication is with permission of the rights owner freely accessible due to an Alliance licence and a national licence (funded by the DFG, German Research Foundation) respectively.