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The impact of outward FDI on the performance of Chinese firms

By C Cozza, R. Rabellotti and M. Sanfilippo


Using new firm-level data from the Emerging Multinationals' Events and Networks DATAbase\ud (EMENDATA), this paper investigates the effects on Chinese firms of Outward FDI (OFDI) into\ud advanced European countries. Propensity score matching is combined with a difference-indifference\ud (DiD) estimator to reduce the problem of self-selection of treated firms in foreign\ud markets, and to eliminate time-invariant and unobservable differences between those firms and\ud the controls. The results provide robust evidence supporting the view that China's OFDI so far\ud have had a positive impact on domestic activities in enhancing firms' productivity and scales of\ud operation, measured by sales and employment. When we distinguish among investments on\ud the basis of entrymode, accounting for endogeneity in the selection process, acquisitions facilitate\ud early access to intangible assets, but are detrimental to financial performance, while greenfield\ud investments have a stronger impact on the scale and productivity of Chinese multinationals\ud investing in Europe

Topics: Acquisitions, Chinese multinationals, Outward FDI, Performance, Reverse spillovers, Economics and Econometrics, Finance
Year: 2015
DOI identifier: 10.1016/j.chieco.2015.08.008
OAI identifier: oai:arts.units.it:11368/2847710
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