Determinants of Chinese and Russian outward foreign direct investments : evidence from 2007-2008

Abstract: The purpose:  The purpose of this paper is to identify the determinants Chinese and Russian outward foreign direct investments during the years 2007 and 2008. We also intended to compare them and discuss the similarities and differences between the countries. We purposed three hypotheses, that Chinese and Russian OFDI are market-, strategic asset- and natural resource-seeking.   Design/methodology/approach:  We have employed a regression ordinary least squares model to identify the determinants of Chinese and Russian OFDI. We have used each countries official data that provided us with 80 countries receiving Russian OFDI and 149 countries receiving Chinese. The coefficients showed what kind of coherence there is between the hypotheses and the level of investment in different countries.   Findings: The findings reveal that China´s OFDI are market-seeking but not strategic asset-seeking. The variables measuring natural resource-seeking did not attain any significance for China and none of the variables measuring market-, natural resource- and strategic asset-seeking attained any significance for Russia. Which gives us the impression that according to our results, the general theory cannot entirely explain Chinese and especially not Russian OFDI which is why we call for a special theory for these two countries.     Keywords: Outward foreign direct investment, China, Russia, BRIC,