Motives influencing China-based Chinese firms' FDI decisions

Abstract

This research investigates the motives influencing China-based Chinese firms' (CBCFs) FDI decisions by analysing primary data. The method of data collection is through a web-based, anonymous questionnaire. Motives for firms' foreign direct investment (FDI) are divided into two categories: external and internal. In order to analyse whether FDI decisions of different types of CBCFs have been influenced by either external or internal motives, eight hypotheses are proposed concerning the following groups: large and small firms (H1a and H1b); firms whose primary business is in the manufacturing and service sectors (H2a and H2b); firms whose FDI destinations have been only developed countries, versus those who have invested in both developing and developed countries (H3a and H3b); and firms that are state-owned and privately-owned (H4a and H4b). Building on the finally received 28 usable questionnaires, the analytical results show that manufacturing CBCFs, CBCFs investing in both developing and developed countries, and state-owned CBCFs are more likely to be motivated externally than service CBCFs, CBCFs investing in only developed countries and privately-owned CBCFs, respectively.