Over the past decade, we have witnessed significant changes in the patterns of global capital flows. What is noteworthy is that outward foreign direct investment (OFDI) from developing countries has grown rapidly. In particular, emerging economies, such as Brazil, Russia, Indian, China and South Africa (BRICS), have become important global investors. Outward FDI from the BRICS countries has grown from $7 billion in 2000 to $126 billion in 2012, accounting for 9% of global outward flows.
The surge of OFDI from emerging economies has raised all sorts of questions. Why do emerging market enterprises invest abroad? What are their competitive advantages compared to their Western counterparts? How do they behave and perform? How do they manage risks in foreign markets? What are the consequences of their activities for other companies and host countries? Importantly, can the conventional theories of multinational corporations (MNCs) explain the behavior of firms from emerging economies?
The China Outward Direct Investor Survey (jointly with Weiyi Shi, UCSD) is a business survey that aims to understand the motivations, risk perceptions, and investment strategies of Chinese MNCs. In collaboration with the China Council for the Promotion of Investment and Trade and Tsinghua University, we have conducted an annual survey of enterprises in China.