TIME

10:00-11:30, March 03, 2011

ROOM：216 New Building

SPEAKER

Jing Li, Associate Professor of Strategic Management, Simon Fraser University

TITLE

Is There a Chinese Model of FDI?

Evidence from Foreign Direct Investment in Natural Resource Industries in Africa

ABSTRACT

Chinese firms have increased significantly their foreign direct investments FDI) in natural resource industries in Africa. This study investigates the factors underlying such significant growth (relative to the modest growth of Western firms in Africa). In particular, we focus on the role played by the Chinese government in supporting these investments. Using interview information with nine Chinese and Western companies in Tanzania and four Chinese and Tanzanian government officials, we find two major differences between Chinese and Western FDI models in Africa. First, the Chinese government has been more actively involved in building economic ties and engaging in negotiations with the host country government to enhance investment opportunities for Chinese firms. The Chinese government also provides valuable financial resources and infrastructure support for Chinese firms that invest in natural resource industries in Africa. In contrast, Western governments provide only general advisory information to prospective foreign investors. Second, Chinese firms in different industries, under the guidance and assistance of the Chinese government, form groups to engage in multiple purpose projects that contribute to local economic development. Western firms, however, act in a less coordinated and more individual way, and therefore contribute to the development of local communities relatively slowly. We discuss the implications of the findings for research, government policy, and firm strategy.