Motives and Determinants of Chinese Foreign Direct Investment in the CEE countries

Abstract

Traditional FDI theories are not sufficient to explain the OFDI activities from emerging markets. In the case of Chinese FDI, other factors such as the institutional, political and social factors are neglected in Dunning’s work will be added in the framework to analyze Chinese OFDI in the CEE countries based on the internationalization experience of Chinese MNCs. These factors are included in the institutional theory which will be revised or extended in the current research. From the perspectives of host countries, the location determinants cover various factors which are categorized into different levels and dimensions: macro-economic factors such as market size (domestic and regional market), labor cost and access to skilled labor, infrastructure, economic openness etc.. Besides, it is believed that intergovernmental linkage plays an important role especially in attracting Chinese investment in Hungary given that the investment growth comes along with the increasing political ties. Based on the literature review, the social and business network proposed in the international entrepreneurship network theories will be considered as well at the micro-level. Therefore, those potential social factors mentioned above are covered in the institutional theories.