Chinese Outward Foreign Direct Investments and Innovation

Pursuing the “Go Global” strategy launched in 1999, China has recently become one of the major outbound investors worldwide. In the first stage, Chinese outward foreign direct investments (OFDIs) were directed to developing countries, mainly driven by resource-seeking motives; afterward, they started targeting advanced economies, searching for new markets and new technologies. This chapter provides some descriptive evidence of dynamic trends and spatial/sectoral distribution of the Chinese OFDIs that are more likely to affect investors’ innovation capabilities: greenfield investments in research and development activities and cross-border acquisitions of medium-high-tech companies located in technologically advanced countries. Moreover, it discusses the impact of such OFDIs by providing a critical review of the existing literature about the moderating factors that enhance the chances of positive outcomes and the learning mechanisms though which investors source new knowledge from foreign subsidiaries. It concludes with suggestions for future research.