Journal of International Business Studies

, Volume 39, Issue 3, pp 337–350

Perspectives on China's outward foreign direct investment


  • Randall Morck
    • Department of Finance and Management Science, University of Alberta and NBER
    • Stern School of Business, New York University
    • Guanghua School of Management, Peking University
  • Minyuan Zhao
    • Ross School of Business, University of Michigan

DOI: 10.1057/palgrave.jibs.8400366

Cite this article as:
Morck, R., Yeung, B. & Zhao, M. J Int Bus Stud (2008) 39: 337. doi:10.1057/palgrave.jibs.8400366


Recent economic data reveal that, at the infant stage, China's outward foreign direct investment (FDI) is biased towards tax havens and Southeast Asian countries and are mostly conducted by state-controlled enterprises with government sanctioned monopoly status. Further examination of China's savings rate, corporate ownership structures, and bank-dominated capital allocation suggests that, although a surge in China's outward FDI might be economically sensible, the most active players have incentives to conduct excessive outward FDI while capital constraints limit players that most likely have value-creating FDI opportunities. We then discuss plausible firm-level justifications for China's outward FDI, its importance, and promising avenues for further research.


outward foreign direct investment China macro perspective corporate ownership structure capital market distortion micro firm theory

Copyright information

© Academy of International Business 2008