Multinational enterprises in China, East Asia, Latin America and Eastern Europe. Moving out or moving in?
| Published date | 06 June 2008 |
| Date | 06 June 2008 |
| DOI | https://doi.org/10.1108/17544400810884691 |
| Pages | 122-135 |
| Author | Busakorn Chantasasawat,K.C. Fung,Hitomi Iizaka,Alan Siu |
| Subject Matter | Economics |
Multinational enterprises in
China, East Asia, Latin America
and Eastern Europe
Moving out or moving in?
Busakorn Chantasasawat
Kenan Institute Asia, Bangkok, Thailand
K.C. Fung
University of California, Santa Cruz, California, USA and
University of Hong Kong, Hong Kong
Hitomi Iizaka
Aoyama Gakuin University, Tokyo, Japan, and
Alan Siu
University of Hong Kong, Hong Kong
Abstract
Purpose – The purpose of this paper is to examine whether multinational corporations moving into
China have a negative impact on the extent of foreign firms moving into other developing countries in
East Asia, Latin America and Eastern Europe.
Design/methodology/approach – The paper controls for a comprehensive set of determinants of
why multinational enterprises enter the economies of East Asia, Latin America and Eastern Europe
and then adds and examines the instrumented foreign direct investment flows into China to proxy the
impact of China on these other economies.
Findings – It was found that the multinational enterprises entering into China stimulate investment
in east Asia, but have no significant effects on multinational enterprises entering into Eastern Europe
and Latin America.
Research limitations/implications – Owing to data constraints, it was not possible to examine if
these conclusions hold for different sectors such as the automobile and electronics sectors.
Practical implications – Governments in developing countries should focus on increasing their
attractiveness to multinational enterprises. Policies such as lowering of the corporate tax rates should
help.
Originality/value – The paper includes a very comprehensive set of factors and then uses foreign
direct investment flows into China as a proxy for the impact of China on other economies.
Keywords Multinationalenterprises,Foreign direct investment,China, Latin America,South East Asia,
Eastern Europe
Paper type Research paper
1. Introduction
Are multinational enterprises (MNEs) moving into China reducing foreign direct
investment (FDI) going into other Asian economies, Latin America and Eastern
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1753-4408.htm
The authors are grateful for very useful comments by two anonymous referees and the
constructive suggestions of an editor.
JCEFTS
1,2
122
Journal of Chinese Economic and
Foreign Trade Studies
Vol. 1 No. 2, 2008
pp. 122-135
qEmerald Group Publishing Limited
1753-4408
DOI 10.1108/17544400810884691
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