China’s regulatory framework for outward foreign direct investment |
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Authors: | Karl P Sauvant Victor Zitian Chen |
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Institution: | 1. Vale Columbia Center on Sustainable International Investment, Columbia Law School – The Earth Institute, Columbia University, New York, NY, USAkarlsauvant@gmail.com;3. Vale Columbia Center on Sustainable International Investment, Columbia Law School – The Earth Institute, Columbia University, New York, NY, USA;4. Belk College of Business, University of North Carolina, Charlotte, NC, USA |
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Abstract: | China has become the world’s third largest outward investor, behind the United States and Japan. A growing body of literature suggests that China’s regulatory framework for outward foreign direct investment (OFDI) is a determinant of the country’s rising OFDI. This article presents a holistic review of that framework, including some possibilities for its improvement. Overall, China’s framework serves two objectives: to help Chinese firms become more competitive internationally and to assist the country in its development effort. In pursuing these objectives, the regulatory framework has moved from restricting, to facilitating, to supporting, to encouraging OFDI, but there are still strong elements of administrative control that make it cumbersome. State-owned enterprises (SOEs) seem to benefit particularly from the current framework when internationalizing through FDI. |
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Keywords: | China outward foreign direct investment OFDI formal institutions government |
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