Dragon meets bull: the determinants of Chinese outward foreign direct investment in Spain

Abstract

This study examines the characteristics and motivations of Chinese investors in Spain. First, we track Chinese investments by merging different sources and ends with a firm-level dataset that allow us to draw a more realistic picture of Chinese outward foreign direct investment in Spain. Second, we gather qualitative information thanks to a unique and detailed questionnaire to check systematically the different hypothesis regarding FDI determinants. Third, the interactions among these factors are studied using multiple correspondence analysis. Results confirm that Chinese investment in Spain mainly aims at supporting Chinese exports with a special interest in accessing third country markets outside the European Union. Respondents also validate the asset-seeking hypothesis, underlining a special interest in acquiring recognised brands or making their brands known, improving quality of their products and accessing new technologies. Chinese economic environment acts as an outstanding push factor, regardless the intrinsic motivations of the firms to invest abroad.