Title

OUTWARD FOREIGN DIRECT INVESTMENT of CHINA'S BANKING SECTOR: DETERMINANTS and MOTIVATIONS

Document Type

Article

Publication Date

1-1-2021

Subject Area

ARRAY(0x55e0ca79bec0)

Abstract

The outward foreign direct investment (OFDI) is vital for the sustainable development of China's banking sector. This paper examines the location determinants of OFDI by China's banks during 2003-2015 with a set of negative binomial panel regression models. We show that the OFDI for China's banking sector generally exhibits market-seeking, resource-seeking and efficiency-seeking motivations. The efficiency-seeking motivation is mostly through the incentive to avert credit risk. The OFDI also tends to flow to economically stable countries. Our results indicate that the Chinese banks' investment decisions are mainly in line with fundamental theories and are robust for different samples and periods.

Publication Title

Singapore Economic Review

Digital Object Identifier (DOI)

10.1142/S0217590821500594

ISSN

02175908

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