Chinese investments in Latin America: An analysis of host country determinants

Despite cultural differences and political instability, Latin America is already the second main destination of China’s outward foreign direct investment (OFDI), only behind Asia. Although natural resource-seeking has been the traditional motivation for Chinese firms doing business in Latin America,...

Full description

Saved in:
Bibliographic Details
Published inJournal of evolutionary studies in business Vol. 4; no. 2; pp. 45 - 67
Main Authors Quer, Diego, Rienda, Laura, Andreu, Rosario
Format Journal Article
LanguageCatalan
English
Published Universitat de Barcelona 2019
Subjects
Host country factors
Foreign Direct Investment
FDI
China
Latin America
Online AccessGet full text

Cover

More Information
Summary:Despite cultural differences and political instability, Latin America is already the second main destination of China’s outward foreign direct investment (OFDI), only behind Asia. Although natural resource-seeking has been the traditional motivation for Chinese firms doing business in Latin America, market-seeking is also becoming an increasingly important driver. The aim of this study is to investigate the influence of host country factors on the location decisions of Chinese multinational enterprises (MNEs) in Latin America. We analyzed a sample of 106 investments carried out by 52 Chinese MNEs in 10 Latin American countries between 2005 and 2017. Our findings indicate that cultural distance negatively influences location choice by Chinese MNEs, while political risk has no influence. Moreover, market-seeking motivations and good diplomatic relations between China and the host country also matter.
ISSN:2385-7137
2385-7137
DOI:10.1344/JESB2019.2.j060