Determinants of technology investment from China into Latin America

ABSTRACT

This research aims to study the determinant of Chinese technology FDI into Latin America, to identify the role of macroeconomic and institutional environment in their investment location choice, and to reveal the influence of key country-level effects. The results indicate that the host country’s economic development and the China-host country trade agreements positively influence Chinese technology investments, while the home economic growth of China might hinder them. These findings suggest a market-seeking motivation rather than the traditional resource-seeking one, whereas the institutional and cultural distance seems not deter Chinese technology investment into the region. Our findings suggest that Chinese OFDI toward Latin America is strongly driven by state-owned enterprises (SOEs) and thanks to the support of their government, maybe less concerned by the host country's institutional environment. This research contributes to a better understanding of the location decision-making of MNEs from emerging markets carrying out investments in others emerging economies.

KEYWORDS:

• Emerging Markets
• China’s OFDI
• institutional environment
• cultural distance
• location of FDIs

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. https://publications.atlanticcouncil.org/China-fdi-latin-america/AC_CHINA_FDI.pdf

Additional information

Notes on contributors

Alvar Castello Esquerdo

Industrial engineer, Master in Management in Information Technologies & Innovation and Ph.D. in Management & Economics. Graduate School of Management, Saint Petersburg University (Russia).