| dc.description.abstract | In this thesis, I examine potential geoeconomic determinants for the location choice of non European investments to the EU28 and EFTA-countries. Over the past decade, Chinese outward
FDI has tripled. With that comes growing accusations that their investments are used to reap
national strategic (geopolitical) returns. The allegations do not only come from nationalist or
protectionist politicians, but is also supported by governments, national security bodies, and
academics. Although the claims vary in degree of explicitness and justification, most suggest
that the investments are not fully commercially driven – often pointing at high-profile cases and
other anecdotal evidence. Still, there has for long been a lack of screening and control
mechanisms for foreign investments. For this reason, I asked myself: are there support of these
allegations in large-scale European microdata of firm ownership? I start by translating these
broad allocations into a narrower research question. To be able to answer this, I conceptualize
six hypotheses that could suggest geoeconomic pull motives, which I operationalize into
testable variables. More precisely, I test whether Chinese investments seem stronger associated
with majority ownership, technology, market power, highly concentrated markets, and critical
infrastructure – compared to other non-European investors. For examining these hypotheses, I
have developed a sophisticated dataset, using longitudinal firm-level data from Orbis.
For my study, I use a dual-method approach. First, I examine China’s investment strategy,
formulated using the method of Babic et al. (2019). I compare China’s strategy to that of other
major non-European countries, as well as the average of all non-European investors. Second, I
develop a unique econometric model estimated using random effects, testing the investments’
intensive margin. Combined, and with all the methodological limitations I problematize, my
study strongly favors the majority ownership and the critical infrastructure hypotheses. In
addition, it provides non-conclusive partial support and disapproval for the market power and
the technology hypotheses, respectively. Overall, when comparing with other extra-European
investors, China is stronger associated with certain potential geoeconomic characteristics.
Although interesting, the results cannot be concluded as meaningful, causal, and generalizable,
or whether they are linked to the government’s strategic (geoeconomic) objectives. Rather, the
findings should be viewed as an attempt to examine investment characteristics that may, but do
not necessarily, imply national strategic objectives. I will argue that my assignment contributes
to enhancing our understanding of motives for foreign investments in Europe. Especially as
empirical studies of geoeconomic determinants are still a relatively uncharted territory, it can
provide new ideas on how to approach such questions. | en_US |
