The Analysis of Chinas Outward Foreign Direct Investment

1

--(95-2415-H-002-011-)

2007/7/31

(94-2415-H-002-016-)

2006/7/31

(93-2415-H-002-009- )

2005/7/31

1992-2000 (92-2415-H-002-013- )

2004/7/31

2007/12/24

' 2007 12 The Effect of Outward Investment to Mainland China on Domestic R&D: A Two-Hurdle Model with Endogenous ODI

' Applied Economics

Investment Timing and Performance of Taiwanese Firms In Mainland Chinafurther evidence

'2007 6

Outward Direct Investment and Entrepreneurial Formation : The case in Taiwan

'2007 12

(A) 20072008(TSSCI)

Chaonan Chen and Hui-Lin Lin2007"Examining Taiwan's Paradox of Family Decline with a Household-based Convoy"Social Indicators Researchforthcoming(SSCI)

Hui-Lin Lin and Wen-Bin Chuang2007"FDI and Domestic Investment in Taiwan-An Endogenous Switching Model", The Developing Economies, vol. 45, issue 4, pages 465-490.(SSCI))

Hui-Lin LinRyh-song Yeh and Ching-Fan Chung2007"The Effect of Outward Investment to Mainland China on Domestic R&D: A Two-Hurdle Model with Endogenous ODI"Applied Economicsforthcoming(SSCI)

2

Lin,Hui-Lin and Ryh-song Yeh2005"The Interdependence between FDI and R&D an application of an endogenous switching model to Taiwans electronics industry"Applied Economics371789-1799(SSCI) (NSC 89-2415-H-002-015)

2004- 32 (4)(TSSCI)( NSC 92-2415-H-002-013)

Hui-Lin Lin and Ryh-song Yeh2004"To Invest or Not to Invest in China: The Choice of Taiwanese Small and Medium Enterprises" Small Business EconomicsVol. 2219-31(SSCI)(NSC 85-2415-H-002-015)

(B)

200720071221

Hui-Lin Lin and Yeh, Ryh-Song, 2007, Investment Timing and Performance of Taiwanese Firms In Mainland China, ( International Conference of Globalization and Development in Chinese Economic Region), Taipei, on June 22-23, 2007.

Hui-Lin Lin and Yeh, Ryh-Song, 2006, The Time Effect of Outward Direct Investment on Domestic Investment, the Academy of International Business 2006 Conference, Beijing, China, on June 23-26, 2006

Hui-Lin Lin and Yeh, Ryh-Song, 2006, Outward Direct Investment and Entrepreneurial Formation: The Entry and Exit in Taiwans Manufacturing Industries, the Academy of International Business 2006 Conference, Beijing, China, on June 23-26, 2006

Ryh-song Yeh and Lin,Hui-Lin2005The Effects of FDI Location Choices on the Home Economy: A Firm Level Analysisthe Academy of International Business 2005 Conference, Quebec City, Canada on July 8-12, 2005.

Chen, C. and H. Lin, 2004, Examining Taiwans Paradox of Family Decline. Paper to be presented at Rc-11 Sociology of Aging-Inter-congress Conference, Aging Societies and Ageing Sociology: Diversity and Change in a Global World, 7-9th September 2004.

2003- 2003

3

(C) 2007

2004

2004()()

2006

2003

2006

4

(Outward FDI)

FDI

The main purpose of the project is to analyze Chinas outward foreign direct

investment (FDI) since her reforms from central planning to market-based economy. We will shed light on Chinas outward FDI by virtue of official data and case studies. This project attempts to elucidate some important issue related Chinas outward FDI in terms of following questions: 1. The analyses indicate whether different enterprises in property rights (state-owner and private) exists different entry modes and location choices in overseas investments. 2. The case studies reveal whether Chinese government has essential effects on Chinese MNCs FDI activities. 3. Is the pattern of Chinas outward FDI congruous with the orthodox theory of FDI.

Key Words: China, Outward Foreign Direct Investment, Entry Mode, Location Choice.

5

Foreign Direct Investment, FDI

2005 6224.29 1995~2005 477 1

2 2005 572 2006 161 3

2005 163 4

(Inward FDI) (Outward FDI)

FDI

1 (2006) (http://www.stats.gov.cn/tjsj/ndsj/2006/indexch.htm) 2 (UNCTAD) 2006(World Development Report 2006) 2005 17 2 3 (2006); 2006 http://hzs.mofcom.gov.cn/aarticle/date/200702/20070204353452.html4 (2005) http://www.mofcom.gov.cn/tongjiziliao/tongjiziliao.html

6

http://www.stats.gov.cn/tjsj/ndsj/2006/indexch.htmhttp://hzs.mofcom.gov.cn/aarticle/date/200702/20070204353452.html

(1) (2) (host countries)

(internalization theory) (eclectic theory) (imbalance theory) (network)

(transnational corporations) (Transaction Costs Ecnomics, TCE) (transaction costs)

1. Vernon (1966)

Vernon

Kojima (1973, 1978), Kojima and Osawa (1984) (Multinational Enterprises, MNEs)

(Casson, 1987)

7

2. Hymer (1960, 1976) (market imperfection) Hymer

Hymer

Hymer

(1) Coase (1937)

Williamson (1975, 1985, 1996) Coase

Williamson (bounded rationality) (incomplete contract) (opportunistic behavior)

Teece (1981, 1986)

(asset specificity) (small bargaining) (hold-up)

Buckley and Casson (1976, 1985, 1998ab), Casson (1983), Rugman (1981, 1982, 1986) Dunning and Rugman (1985) Hymer

5Coase Williamson

5 Bain-typeWilliamson-type

8

(2) Dunning (1981, 1988, 1993, 1995, 2000)

(ownership advantages)

(know-how) (locational advantages)

(international advantages)OLI

Dunning

(3) Moon and Roehl (1993, 2001)

Moon and Roehl

(4)

Chen and Chen (1998)

9

(2003) http://www.mofcom.gov.cn/tongjiziliao/tongjiziliao.html

(2004) http://www.mofcom.gov.cn/tongjiziliao/tongjiziliao.html

(2005) http://www.mofcom.gov.cn/tongjiziliao/tongjiziliao.html

2006 http://hzs.mofcom.gov.cn/aarticle/date/200702/20070204353452.html

(2006) http://www.stats.gov.cn/tjsj/ndsj/2006/indexch.htm

Joe S. Bain, Barriers to New Competition (Cambridge: Harvard University Press, 1956).

Buckley, Peter J. and Mark C. Casson. The Future of the Multinational Enterprise (London: Macmillan, 1976).

Buckley, Peter J. and Mark C. Casson, The Economic Theory of the Multinational Enterprise (London: Macmillan, 1985).

Buckley, Peter J. and Mark C. Casson, Models of the Multinational Enterprise, Journal of International Business Studies, vol. 29, no. 1(1998a), pp. 21~44.

Buckley, Peter J. and Mark C. Casson, Analyzing Foreign Market Entry Strategies: Extending the Internalization Approach. Journal of International Business Studies, vol. 29, no. 3(1998b), pp. 539~562.

Casson, Mark C. The Growth of International Business (London: Allen and Unwin, 1983).

Casson, Mark C. The Firm and the Market: Studies in Multinational Enterprises and the Scope of The Firm (Cambridge, Mass: MIT Press and Oxford: Blackwell, 1987).

Chen Homin, and Tain-Jy Chen Network Linkage and Location Choice in Foreign Direct Investment, Journal of International Business Studies, vol. 29, no. 3(1998), pp. 445-467.

Coase, Ronald H. The Nature of the Firm, Economica, vol. 4, no. 16(1937), pp. 386~405.

Deng, Ping Foreign Investment by Multinationals from Emerging Countries: The Case of China, Journal of Leadership and Organizational Studies, vol. 10, no. 2(2003), p. 110-118.

10

http://hzs.mofcom.gov.cn/aarticle/date/200702/20070204353452.html

Dunning, John H. International Production and the Multinational Enterprise (London: Allen & Unwin, 1981).

Dunning, John H. The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions, Journal of International Business Studies, vol. 19, no.1(1988), pp. 1~32.

Dunning, John H. Reappraising the Eclectic paradigm in the Age of Alliance Capitalism, Journal of International Business Studies, vol. 26, no. 3(1995), pp. 461~491.

Dunning, John H. The Eclectic Paradigm As an Envelope for Economic and Business Theories of MNE Activity, International Business Review, no. 9(2000), pp. 163~190.

Dunning, John H. and Alan M. Rugman, The Influence of Hymers Dissertation on the Theory of Foreign Direct Investment, The American Economic Review, vol. 75, no. 2(1985), pp. 228~232.

Hymer, Stephen H. The International Operations of National Firms: A Study of Direct Foreign Investment (Cambridge: MIT Press, 1976).

Kojima, K. A Macroeconomic Approach to Foreign Direct Investment, Hitotsubashi Journal of Economics, vol. 14, no. 1(1973), pp. 1~21.

Kojima, K. Giant Multinational Corporations: Merits and Defects, Hitotsubashi Journal of Economics, vol. 18, no. 2(1978), pp. 1~17.

Kojima, K. and T. Osawa, Micro- and Macro-economic Models of Ddirect Foreign Investment: Toward a Synthesis. Hitotsubashi Journal of Economics, vol. 25, no. 1(1984), pp. 1~20.

Moon, Hwy-Chang and Thomas W. Roehl, An Imbalance Theory of Foreign Direct Investment, Multinational Business Review, vol. 1, no.1(1993), pp. 55~65.

Moon, Hwy-Chang and Thomas W. Roehl, Unconventional Foreign Direct Investment and the Imbalance Theory, International Business Review, no. 10(2001), pp. 197~215.

Rugman, Alan M. Inside the Multinationals: The Economics of Internal Market (New York: Columbia University Press, 1981).

Rugman, Alan M. New Theories of the Multinational Enterprise (New York: St. Martins Press; London: Croom Helm, 1982).

Rugman, Alan M. New Theories of the Multinational Enterprise: An Assessment of Internalization Theory. Bulletin of Economic Research, vol. 38, no. 2(1986), pp. 101~118.

Teece, David J. The Multinational Enterprise: Market Failure and Market Power Considerations, Solan Management Review, vol. 22, no. 9(1981), pp. 3~17.

Teece, David J. Transactions Cost Economics and the Multinational Enterprise, Journal of Economic Behavior and Organization, vol. 7, no. 1(1986), pp. 21~45

Williamson, Oliver E. Markets and Hierarchies: Analysis and Antitrust Implications:

11

A Study of the Economics of Internal Organizations (New York: The Free Press, 1975).

Williamson, Oliver E. The Economic Institutions of Capitalism (New York: The Free Press, 1985).

Williamson, Oliver E. The Institutions of Governance (New York, Oxford: Oxford University Press, 1996).

Vernon, Raymond International Investment and International Trade in the Product Cycle. Quarterly Journal of Economics, vol. 80, no. 2(1966), pp. 190~207.

United Nations Conference on Trade and Development (UNCTAD), World Development Report, Transnational Corporations, Employment and the Workplace (United Nations Publication, New York and Geneva: United Nations, 1994).

United Nations Conference on Trade and Development (UNCTAD), World Development Report: Transnational Corporations and the Internationalization of R&D (United Nations Publication, New York and Geneva: United Nations, 2005).

United Nations Conference on Trade and Development (UNCTAD), World Development Report, FDI from Developing and Transition Economies: Implications for Development (United Nations Publication, New York and Geneva: United Nations, 2006).

United Nations Conference on Trade and Development (UNCTAD), FDI/TNC database (www.unctad.org.fdistatistics).

12

http://www.unctad.org.fdistatistics/

(2003~2006) 30 30 30

U-turn FDI

1.

(2003~2006)

30 30 30

13

a

TCL

CWAY

a

http://www.cwgc.cn/jituanzs-index.htm

2.

55 100

14

http://www.cnpc.com.cn/http://www.chinanetcom.com.cn/http://www.chng.com.cn/http://finance.sina.com.cn/roll/20031015/1945476230.shtml

2006 KUFPEC

Seram Non-Bula

2006

9,740

4.15

1988 MASTA 340

1992 1.18

1995

1996

1998

NAa

1997

2005 17 18

15

3.2

24

2002 Devon Energy

2005 PetroKazakhstan

2005 ONGC

2006

2.16

41.8

14.2

2000

2001

9,280

1.5

2002 Repsol-YPF

2002 (BP) Tangguh

2003

2004 (BG) Muturi

2006 SAPETRO

5.85

2.75

3.48

9,810

22.68

2002

2004

8,000

10

2002

2004 (CVRD)

3,000

15

2003 Atlantis

2003

2006

1.05

1

4

15

http://www.cnpc.com.cn/http://www.cnpc.com.cn/http://www.cnpc.com.cn/http://www.chinanetcom.com.cn/http://www.chinanetcom.com.cn/

Omimex de Colombia

2006

Adisseo

4

()

2003 HPAMONON 450

2003 BITEL 2,850

Sherwin NA

2004

Jimblear

90

50

1.5

aNA

1994

2004 IBM

NA

17.5

1993

1995 SAFRON

1997 SVA

SVA

1997 DVD

98

NA

NA

NA

NA

TCL

1996

1999

2002 Schneider

2003 Thomson

2004 TCL Alcatel

1.5

1

820

2.3

5,500

1997 LKG

1997

NA

NA

16

http://www.chng.com.cn/http://www.chng.com.cn/

1999

2001

3,000

NA

2001 2,000

2002 -

2004

5,970

5.2

2002

300

2002

2003 7

2004 F.Zimmermann

1,300

1,000

2002

46

1,400

2002 SPS Polystor

1,160

2002 Interwave

177

()

2002

900

2003 HYDIS

TFT-LCD BOEHYDIS

3.8

2003 LUTZ

NA

2003

NA

2003 Wohlenberg

2003

60

NA

2004 DA 3500

17

http://finance.sina.com.cn/nz/yinshuaye/index.shtmlhttp://www.boe.com.cn/http://www.boe.com.cn/

2004

-- SCHIESSAG

200

2004

Sneda

2004

NA

2005 MG Rover

5,000

2005 950

2005

NA

2005 ABAZB

600

2006

1

3,000

()

1994

2001 UAI

2003

-

NA

2500

NA

()

1997

1997

2002 OptiMight

2003 Cognigine

NA

3,000

NA

NA

1999 NA

CWAY

2000

180

()

2001

CDMA

300

18

2000

2004 TATA, WILSON

2004

100

NA

2001 2006

1200

100

()

2003

2004

NA

(

2004

NA

2004

NA

2004

NA

2004

220

2005

NA

3.

1

2

1

1

1

2

19

10

3

2

3

2

12

1

2

1

2

2

3

1

1

1

1

2

5

1

6

1

2

1

20

(

, , )

21

3

3

1

(1). (2).

(3).

(4).

FDI FDI

21

1. 2.

3.

4.

5.

22

400,000

100,000

.

()

150,000

250,000

50,000

150,000

()

400,000

23