Exploring China’s State-led FDI Model: Evidence from the Extractive Sectors in Latin America

This study explores China’s support of outward foreign direct investment (OFDI) through state supported development loans to host countries. Through such loans, China develops commercial and diplomatic relationships with host countries, which, in turn, facilitates Chinese firms’ access to resources while at the same time limiting their exposure to host country political risk. The authors’ provide evidence in Latin America that although Chinese OFDI occurs in countries where government-related political risk is high, Chinese firms are less likely to be involved in public disputes with the host government, though they are more likely to engage in conflicts with nongovernment stakeholders.

This piece appeared as Shapiro, Daniel, Carlos Vecino, and Jing Li. Exploring China’s State-led FDI Model: Evidence from the Extractive Sectors in Latin America. Asia Pacific Journal of Management (2017), pp. 1-27. Further information is available here: https://link.springer.com/article/10.1007/s10490-017-9526-z.