Chinese Foreign Direct Investment in the United States: Growth, Location Choice, and Entry Modes
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- Social and Behavioral Sciences
The rapid growth of Chinese foreign direct investment (FDI) in the United States is a relatively recent phenomenon. Due to the unbalanced U.S.-China trade relations and the huge potential of outbound FDI from China, the inflow of Chinese FDI to the United States has generated considerable interest among academics and policymakers. The purpose of this research is to shed some light on the investment behavior of Chinese companies in the U.S. market. The study is guided by four main research questions, that is, 1) how much have Chinese companies invested in the United States? 2) in what sectors of the US economy have the Chinese companies invested? 3) where and to what extent is the Chinese FDI localized within the United States? and 4) how do Chinese companies enter the U.S. market? To address these questions, we first construct a dataset of Chinese FDI in the United States covering the period 1980-2010. We then present preliminary results pertaining to the growth trajectory, sectoral distribution, location choice, and modes of entry of the Chinese FDI in the United States. This research also looks into the demographic, economic, and institutional characteristics of those U.S. regions and communities that have attracted large shares of Chinese FDI. Limitations of the research and future research directions are also discussed.