Research of China's Outward Direct Investment Determinants: The Perspective of Multiple Distances.

This paper examines the role of various distances between home and host countries in shaping the decision of foreign direct investment. Using a panel dataset of Chinese firms which have invested in 43 countries and regions during 2003-2009, we show that institutional distance is favourable to Chinese investment, while economic and cultural distances negatively affect Chinese investment. Further, technology distance displays an inversed-U shape with Chinese investment. These findings point to the importance of going beyond firm boundary to consider various distances between home and host countries in making investment decisions. And these findings are helpful to Chinese business managers to make foreign investment decisions. [ABSTRACT FROM AUTHOR]