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Country-of-Origin Effects of Foreign Investments in the People's Republic of China

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Abstract

This paper investigates the existence of country-of-origin effects occurring in foreign investments in the People's Republic of China. The eclectic theory of international production posits that the pattern of foreign investments should vary by country of origin. This aspect of the eclectic theory is difficult to test directly, especially in developing countries, because of the relatively small numbers of foreign investment projects in a single country. The data used in this research cover 1,665 Sino-foreign joint ventures (JVs) from 1979 to 1985, allowing a more reliable test of this aspect of the theory. Statistical evidence suggests that country-of-origin effects are indeed present in foreign investment activities in China.

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Authors and Affiliations

  1. Kent State University,

    Frederick W. Schroath

  2. Kent State University,

    Michael Y. Hu

  3. Youngstown State University,

    Haiyang Chen

Authors
  1. Frederick W. Schroath
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  2. Michael Y. Hu
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  3. Haiyang Chen
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*Frederick W. Schroath is Assistant Professor of Finance at Kent State University. He received his Ph.D. from the University of South Carolina. His research interests include international insurance operations and foreign market entry. His work has appeared in the Journal of Risk and Insurance and the Geneva Papers on Risk and Insurance.

**Michael Y. Hu is Associate Professor of Marketing at Kent State University. He received his Ph.D. from the University of Minnesota. His research on Chinese joint ventures co-authored with Haiyang Chen has appeared in Financial Management, Management International Review and the Journal of Business Research.

***Haiyang Chen is Associate Professor of Finance at Youngstown State University. He received his Ph.D. from Kent State University. His research interests include international joint ventures and management ownership.

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Schroath, F., Hu, M. & Chen, H. Country-of-Origin Effects of Foreign Investments in the People's Republic of China. J Int Bus Stud 24, 277–290 (1993). https://doi.org/10.1057/palgrave.jibs.8490233

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  • DOI: https://doi.org/10.1057/palgrave.jibs.8490233

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