• The Journal of Asian Finance, Economics and Business
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• v.7 no.2
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• pp.157-168
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• 2020

Since the economic crisis sweeps across the world in 2008, the foreign direct investment of various countries has been greatly impacted. Therefore, this paper regards China as an example to analyze China's outward foreign direct investment patterns in terms of Asian financial markets with a panel data over the period 2003-2017. We mainly focus on the money market oriented outward foreign direct investment and foreign exchange market oriented outward foreign direct investment. Using the individual fixed effect model to conduct empirical analyses, the empirical findings indicate that China will reduce its foreign direct investment amount to a country with large money supply and China will increase its foreign direct investment amount to a country with large foreign exchange reserves. Furthermore, when a country has signed Free Trade Agreement with China, China will increase more foreign direct investment amount to these countries than that of a country who has not signed Free Trade Agreement with China. Moreover, the empirical findings indicate that no matter what the money market oriented outward foreign direct investment or foreign market oriented outward foreign direct investment, China will reduce its foreign direct investment amount to these Asian countries due to the global economic crisis.

• East Asian Journal of Business Economics (EAJBE)
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• v.6 no.3
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• pp.24-36
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• 2018

Purpose - From establishing China-Japan diplomatic relations in 1972, the relations between two states has improved a lot, from which makes the government and the people reap much benefit. Owing to this reason, this paper aims at exploiting the impact of exchange rate volatility of RMB on China's foreign direct investment to Japan. Research design and methodology - The quarterly time series data from 2003 to 2016 will be employed to conduct an empirical analysis under the vector error correction model. Meanwhile, a menu of estimated methods such the Johansen co-integration test and the Granger Causality test will be also used to explore the impact of exchange rate volatility of RMB on China's foreign direct investment to Japan. Results - The empirical analysis results exhibit that the real exchange rate has a positive effect on China's foreign direct investment to Japan in the long run. Conversely, the real exchange rate volatility of RMB, the trade openness and the real GDP have a negative effect on China's foreign direct investment to Japan in the long run. However, in the short run, the China's foreign direct investment to Japan, the real exchange rate, the trade openness and the real GDP in period have a negative effect on China's foreign direct investment to Japan in period. Oppositely, the real exchange rate volatility of RMB in period has a positive effect on China's foreign direct investment to Japan in period. Conclusions - From the empirical evidences in this paper provided, it can be concluded that an increase in the exchange rate volatility of RMB can result in a decrease in the China's foreign direct investment to Japan in the long run. However, an increase in the exchange rate volatility of RMB can lead to an increase in the China's foreign direct investment to Japan in the short run. Therefore, the China's government should have a best control of the real exchange rate volatility of RMB so as to improve China's foreign direct investment to Japan.

• The Journal of Industrial Distribution & Business
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• v.14 no.11
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• pp.27-35
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• 2023

Purpose: China's economy has changed considerably in recent decades. By delivering a comprehensive knowledge of the elements that support successful foreign direct investment (FDI) in China and practical insights for multinational firms operating in this dynamic environment, this research offers a new perspective and sets itself apart from previous studies. Research design, data and methodology: It is necessary to give a thorough overview of the body of information on successful FDI in China, which justifies the adoption of a systematic literature review. The study may use a wide range of studies because of this methodology, which guarantees that inferences have a solid and supported basis in data. Results: The findings in the present study have clarified how China's government policies and regulatory framework affect foreign direct investment (FDI). Previous studies have indicated that regulatory changes can significantly impact FDI. For instance, more foreign direct investment (FDI) has been drawn to liberalized industries such as technology and finance. Conclusions: In conclusion, for foreign direct investment (FDI) to be successful in China, it is essential to consider these four factors: local partnerships and cultural adaptation, market research and entry strategy, regulatory environment and policy support, and risk management and contingency planning.

• The Journal of Economics, Marketing and Management
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• v.12 no.3
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• pp.1-12
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• 2024

Purpose: As a major economy attracting foreign investment, China is currently facing significant international economic pressure due to the appreciation of the RMB. Additionally, China is at a critical period of socio-economic development, where foreign direct investment (FDI) plays an indispensable role in stabilizing economic growth, adjusting industrial structure, and promoting economic transformation. Research design, data and methodology: This paper focuses on the relationship between RMB exchange rate expectations and FDI. It examines the magnitude of their relationship through empirical research using cointegration tests, Granger causality tests, and BVAR (Bayesian Vector Autoregression) analysis. Results: The comprehensive study of the empirical results in this paper concludes that there is a long-term cointegrated relationship between China's RMB exchange rate expectations and foreign direct investment, indicating that their relationship is stable in the long run. It is also found that RMB exchange rate expectations have a significantly positive impact in the short term, but this impact is not significant in the long term. Conclusions: The paper also considers the possibility of establishing a China-EU Free Trade Area in the future and offers policy recommendations regarding RMB exchange rate expectations and foreign direct investment.

• The Journal of Fisheries Business Administration
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• v.39 no.1
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• pp.133-162
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• 2008

In 1970, direct overseas investment in Korean fisheries started to sell the frozen marine products to Singapore with establishing local subsidiary. Direct overseas investment in China has carried out since Korea and China established diplomat relationship in 1992. the former day, The Korea invested indirectly in China via Hong Kong. It has reported that 253 local subsidiaries applied to China government permit at the end of 2004. The results will make a decision on whether to invest continuously. The results of actual proof analysis has announced that a successful investment of fishery company is mainly influenced in its own government policy. Many advantages of tax and administration for foreign company in China have been changed and vanished comparing to the beginning time of entering china. So. it is imperative for Korean government to take measures to changing policy of Chinese government. The early days, investment of fishery company is type of resources and abundant resources will affect succeeding investment. Nowadays, the type of the investment is the production oriented investment. And then many direct investment linked the production oriented investment have been conducted in many area in China. So. the production oriented investment will affect logistics and successful investment in China. And, The factor of Market potential in Market Factors in the middle of changing market oriented investment will conclude whether to invest. As the china exchange system changed from the fixed exchange system to the fluctuating exchange system. Risk of exchange rate will affect corporate's parent business. The local risk (regulation of import and export, remittance) will affect succeeding investment of corporate's parent.

• Korea Trade Review
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• v.46 no.1
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• pp.1-21
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• 2021

The main purpose of this research is to analyze the changes in investment motivation by year through time series and cross-sectional analysis of the factors and investment decisions of Korean manufacturing companies. According to the investment pattern for Asean from the 1980s to the 19th, the first expansion period was 82 to 86, the average increase in overseas investment for securing foreign raw materials due to the second oil shock, and the second expansion period was a gradual increase in exports to the U.S. in 1987 to 1996. During the first stagnation period, direct investment in Asean stagnated in the aftermath of the 1998-05 Asian crisis, and in the third expansion period, part of the production facilities invested in China were relocated to Asean, increasing Asean's investment to become Korea's largest manufacturing investment in 17. Korea's proportion of investment in Asean surpassed that of mass investment since 10 years ago, and the proportion of investment in manufacturing sector has been transferred from China to Asean, and after 17 years, it has served as an overseas production base connecting China. As such, The main purpose of the research will be to extract the determinant factors and key factors for overseas direct investment and investment patterns in conjunction with global manufacturing companies' production base relocation and investment trends through empirical analysis. This research paper gave basic reference to the motivation and determinant of investment 16 years ago, and analyzed the changes in investment motivation by year and content through empirical analysis, contributing some reasonable purpose to the decision of companies and policy makers interested in overseas direct investment.

• Journal of the Economic Geographical Society of Korea
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• v.6 no.2
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• pp.355-375
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• 2003

Since the mid 1980s, the emergence of the Newly Industrialized Countries has been the most remarkable mutation in the foreign direct investment. This emergence is creating the new international spacial flows constituted by the developed country, the newly industrialized country and the developing country. According to the active foreign direct investment of the Asia Newly Industrialized Countries (ANICs) into East Asia from the middle of the 1980s, the intra-East Asia direct investment flow has a observable structure hierarchic composed of Japan, ANICs, ASEAN and China. In the inflow of intra-East Asia direct investment, Japan and ANICs flows from the extra-developed country and Japan, AESAN from ANICs, Japan, and China from the ANICs. In the outflow, Japan flows relatively into the ANICs and ASEAN, ANICs into ASEAN and China, ASEAN and China into the ANICs. In conclusion, the emergence of ANICs and theirs role intermediate in the East Asian economy causes the intra-East Asia direct investment flows to make a hierarchical structure.

• International Commerce and Information Review
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• v.12 no.3
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• pp.223-242
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• 2010

Since the reopening of official relations in 1992, Korean and China have become major trading partners, apart from myriad exchanges in culture and other aspects of society. The subject of this study is to analysis on determinants for China market entry type of the Korean company. This article measure the effects on Korea exporter interests of Korea's trade with china. This paper investigates the determinants of export and FDI referring in entry type in the China's market of Korea company. There are 250 samples and 130 returns, 170 of them are analyzed for a entry competitiveness. This paper has there main a parts, Multiple regression result shows that the export entry competitiveness are positively affected by the product character and market character. However, The enterprise character and location character does not affect in the export competitiveness. Also, the direct investment entry competitiveness are positively affected by the market character and location character. However, The enterprise character and product character does not affect in the direct investment. Logit analysis result show that the direct investment entry does positively affected in CEO international mind and export entry does affect in more than rival competitive products. In addition, the export entry does positively affected in the customer taste diversity, political risk and economical risk, market environment instability.

• Korea Trade Review
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• v.46 no.3
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• pp.119-133
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• 2021

After 'Zhou Chuchu (走出去, Go global)' in the early 2000s, and with the 'One-to-One Road' initiative in 2012, China's Overseas Foreign Direct Investment (OFDI) has increased significantly, resulting in high academic interest. The purpose of this study is to analyze the impact of national risks of home country on China's OFDI by using data from 49 countries along the 'One-to-One Road' between 2007 and 2018, and to compare the factors of national risks that attract investment from the world. As a result of the study, market economy companies' perceptions of national risks are mostly negative, so risk acts as a deterrent to investment. On the other hand, national risks of home countries have had positive effects on China's OFDI, which would mean that Chinese investors, mostly state-owned enterprises have a high tendency to invest in regions or countries with high national risks. Other economic factors, such as the size of the investment partner country's market, GNI per capita, and trade openness, had a positive (+) effect, and natural resources had a negative (-) effect on China's OFDI. As dummy variables, FTA, which is an economic and diplomatic factor, SCO, which is a political and diplomatic factor, and bordering which is a geographical factor, were also found to have a positive (+) effect. This study implies the investment pattern of China's OFDI is due to the characteristics of China's unique geopolitical and economic system, and it is judged to be influenced by political and strategic factors, especially the aspects led by state-owned enterprises.

• Journal of Korea Trade
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• v.27 no.3
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• pp.161-178
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• 2023

Purpose - purpose of this paper is to analyze the effects of the investment facilitation levels of 11 RCEP countries (excluding Myanmar, Brunei, and Laos due to lack of data) on China's outward foreign direct investments(OFDI) using balanced panel data from 2010 to 2019. Design/methodology - First, four investment facilitation measurement indicators (regulatory environment, infrastructure, financial market, ease of doing business) were selected,investment facilitation scores of the 11 countries were obtained using the principal component analysis, an investment gravity model was established with nine explanatory variables (investment facilitation level, market size, population, geographic distance, degree of opening, tax level, natural resources, whether the country is an APEC member or not, and whether a valid bilateral investment treaty with China has been concluded) were used to establish an investment gravity model, and regression analyses were conducted with OLS and system GMM. Findings - The results of the regression analyses showed that investment facilitation levels had the greatest effect on China's OFDI, all four first-level indicators had positive effects on China's OFDI, and among them, the institutional environment had the greatest effect. In addition, it was shown that explanatory variables such as market size, population, geographical distance, degree of openness, natural resources, and whether or not a valid bilateral investment treaty has been concluded would have positive effects on China's OFDI, while tax levels and APEC membership would impede China's OFDI to some extent. Originality/value - Since the Regional Comprehensive Economic Partnership (RCEPT) came into effect not long ago, there are not so many studies on the effects of investment facilitation levels of RCEP member states on China's OFDI, and the investment facilitation measurement index constructed in this paper is relatively systematic and scientific because it includes all the contents of investment facilitation related to the life cycle of company's foreign direct investments.