Chinese and Indian M&As in Europe: The relationship between motive and ownership choice

CIRCLE WP, 3, University of Lund, Lund. Forthcoming in The Routledge Companion to Merger and Acquisition; A. Risberg, D. King and O. Meglio (Eds); Routledge, London.

With L. Piscitello and V. Scalera

The present paper is about the ownership choices by Emerging Market Multinational Enterprises (EMNEs) when they invest in Europe through M&As, and the relationship with the main motivations underlying their international expansion. Namely, we claim that EMNEs prefer to acquire less control and keep the local partner when they invest for seeking knowledge. Additionally, EMNEs choose partial acquisitions in case of high dissimilarity in terms of culture, industry and knowledge base.
Our empirical analysis relies on a dataset of M&As undertaken by Chinese and Indian MNEs in high and medium-high tech sectors, in the period 2003-2011. We use content analysis of public announcements and company reports for classifying the main motivation of the acquisitions, and econometric analysis for testing our hypotheses. Our results confirm the expectations.


An analysis of Chinese outward FDIs in Europe with firm-level data

CIRCLE WP, University of Lund, Lund. Forthcoming in China and the World Economy.

With A. Amighini, C. Cozza and M. Sanfilippo

The empirical literature on China’s outward foreign direct investment (OFDI) mainly relies on aggregate data from official statistics, whose international reliability is currently a matter of concern, not taking account some relevant features such as the industry breakdowns, ownership structures and modes of entry. A novel firm-level database – EMENDATA – compiled by matching data from several available sources, on various types of cross-border deals, and including information on group structure, enables new empirical analyses and provides new insights into the rapidly increasing presence of Chinese companies abroad. In this paper, exploring the potential of this database we offer an informative and comprehensive assessment of the geographical and specialization patterns of Chinese outward FDI into Europe and suggest new avenues for further research on this highly policy relevant issue.


China’s outward FDI: An industry-level analysis of host-country determinants

Frontiers of Economics in China, 8 (3), 903-936

The article is co-authored with Alessia Amighini and Marco Sanfilippo.

We empirically analyse the host country determinants of Chinese outward foreign direct investments (FDI) for the years 2003 to 2011, using disaggregated data by country and industry. Our results suggest that the host-country determinants of Chinese FDI differ between high- and low-income countries. While all Chinese FDI are invariably market seeking, other motivations stand out for different groups of sectors in specific country groups. The resource seeking motivation is relevant for manufacturing FDI to high-income countries with relatively high fuel abundance, and to low-income countries with primary resource abundance (other than fuels). Differently, the strategic-asset seeking motivation, measured by the level of R&D spending on GDP, positively and significantly only affects Chinese manufacturing and services FDI to OECD countries, while higher education levels are attraction factor for all investing firms. Natural resources are an important attraction factor for Chinese FDI, not only in resource-related sectors, but also in manufacturing and services sectors. Finally, Chinese FDIs tend to follow exports (rather than fostering them), especially in services sectors.


The “Marco Polo” effect: Chinese FDI in Italy

International Journal of Technology and Globalization, 4(4), 277-291 

The article is written with Carlo Pietrobelli and Marco Sanfilippo.

This study investigates the motivations driving Chinese outward direct investment to Italy. The analysis is based on secondary sources and in- depth interviews with key informants and senior managers of Chinese affiliates in Italy. The evolution of the Chinese pattern of entry in Italy confirms the pattern followed by Chinese firms in other European countries, adding some additional interesting results. Starting from small-scale operations in trade-related activities, Chinese FDI have evolved towards the acquisition of tangible and intangible resources that are deemed necessary to improve China’s presence in international markets and to upgrade their technological and production capacities.
Chinese investments in Italy are increasingly targeting the acquisition of technological capabilities and of design skills and brands to tap local competences available in specialized manufacturing clusters in sectors such as automotives and home appliances. The main industries of specialization of Chinese OFDI in Italy reflect this approach and appear to be related to China’s strategy to increase the sophistication of its exports and to move away from standardized commodities and intermediate manufactures and components.