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Journal of Economic Integration 2012 December;27(4) :564-583.
DOI: https://doi.org/10.11130/jei.2012.27.4.564
Testing the Asset-seeking Hypothesis :through the Investments of Chinese and Indian Firms in Europe
He Yong and 1
Zhou Hong 2
1University of Auvergne
2Fudan University
Corresponding Author: He Yong ,Tel: 33473177500, Fax: 33473177428, Email: Yong.he@udamail.fr
Copyright ©2012 Journal of Economic Integration
ABSTRACT
We use the investments of Chinese and Indian MNCs in Europe to test the hypothesis that the main motivation of the Southern MNCs for investing in the Northern countries is asset- or technology- seeking. After showing that the previous work has not adequately tested this hypothesis due to its use of country-level FDI flow data, we conduct our tests with count data models tests. The results reveal that this motivation for Chinese MNCs is strong, whereas Indian MNCs, due to their excessive concentration in the UK and in software sector, have a weaker asset-seeking motivation than Chinese MNCs.

JEL Classification
F21: International Investment; Long Term Capital Movements
F23: Multinational Firms; International Business
O52: Europe
O57: Comparative Studies of Countries
Keywords: Location Strategy | China | India | The Southern MNC | Asset-seeking FDI | Europe
 
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