Papers in Innovation Studies #27 CIRCLE – Lund University

with Vito Amendolagine and Claudio Cozza

In this paper we undertake an empirical analysis  of Chinese and Indian FDIs in Europe to investigate their identity and characteristics and the association between these features and their international business strategies. We exploit a dataset at the level of the investing firms. In relation to mode of entry, we find that the greenfield is a more likely option for large-sized companies, and that weak propensity for innovation is associated with a low probability to enter through a merger or acquisition. A high propensity for innovation is related to asset-seeking FDI, while high profitability is needed to invest in the core EU countries.