Exploring the Outflow of FDI from Developing Countries: Case Studies from China, India and South Africa

Angathevar Baskaran, Liu Ju, Mammo Muchie

    Research output: Contribution to conference without publisher/journalPaper without publisher/journalResearchpeer-review

    Abstract

    A new trend has emerged in the flow of foreign direct investment (FDI) in recent times. FDI from the emerging and developing economies such as China, India, South Africa and Brazil is flowing to both developed and developing economies. There is more flexibility of movement of capital and knowledge which does not conform to hitherto held assumptions that FDI flows in a particular pattern, that is, largely from the developed economies to the developing economies. This new trend needs to be captured both empirically and conceptually. We explore the factors driving this outward flow of FDI from developing economies and the shape and nature of this flow. For this, we employ case studies of companies from China, India and South Africa. The results show that the main motivating factors behind OFDI are: to emerge as a global player/ leader or regional player; to achieve international competitiveness through gaining new markets in the developing world (regional markets) and increasing existing share or gaining access to developed countries (global market); to gain access to new R&D/ technological capabilities; to move up the value chain in terms of technological complexity; and (ii) to ensure raw material security in the long term (in the case of companies in natural resources sectors). All these factors are evident in the new trend of OFDI from the emerging or transition economies to the rest of the world.
    Original languageEnglish
    Publication date15 Nov 2011
    Number of pages34
    Publication statusPublished - 15 Nov 2011
    EventGlobelics 2011: Creativity, Innovation and Economic Development - Buenos Aires, Argentina
    Duration: 15 Nov 201117 Nov 2011

    Conference

    ConferenceGlobelics 2011
    Country/TerritoryArgentina
    CityBuenos Aires
    Period15/11/201117/11/2011

    Keywords

    • Keywords: Outward Foreign Direct Investment; OFDI, Emerging economies; Developing economies; China; India; South Africa

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