From Tables 8 9 we can observe that Central and West Asia Russia and Western

From tables 8 9 we can observe that central and west

This preview shows page 37 - 40 out of 62 pages.

From Tables 8-9, we can observe that Central and West Asia, Russia, and Western Europe are the most favorable destinations of Chinese SOE and non-SOE acquisitions. SOEs were particularly active in acquisitions of target firms in infrastructure sectors, whereas non-SOEs in non-infrastructure sectors. This suggests that there may be complementarity in ODI between infrastructure sectors and non- infrastructure sectors and between SOEs and non-SOEs. It is likely that non-SOEs were encouraged by the prospects of improved logistics infrastructure following SOEs’ ODI in those regions, the expected reduction in trade costs and business environment uncertainty, the more cooperative government policies, etc., in the OBOR partner countries, so that they followed the footprints of SOEs to expand into the non-infrastructure sectors there. 7. Conclusion The OBOR initiative is a national strategy of promoting international economic integration implemented in a state capitalism model under an authoritarian regime. Given its vast geographical coverage and economy size, the emergence of the belt- road country group is an important new development in the world economy in recent years. In this study, we examine the ODI activities of Chinese firms in response to the ACCEPTED MANUSCRIPT
Image of page 37
ACCEPTED MANUSCRIPT 37 formation of this great policy initiative. It is found that ODI, especially mergers and acquisitions, rose significantly in the wake of the strategy announcement. Both SOE acquirers and non-SOE acquirers contributed to the surge of acquisitions in the belt- road countries, especially the land-based silk-road countries. SOEs played a primary role in the acquisitions of target firms in infrastructure sectors in the belt-road countries, whereas non-SOE acquirers played a particularly active part in the non- infrastructure sectors. Comparatively speaking, East Asia, Central and West Asia, Russia, and Western Europe witnessed the most significant inflow of Chinese non- SOE acquisitions in non-infrastructure sectors, whereas Central and West Asia, Western Europe and Russia are favorable destinations of Chinese SOE acquisitions in infrastructure sectors. Our results also show that the participating countries, especially the land-based silk-road countries, have been cooperative with Chinese acquirers, probably thanks to the high-profile international political cooperation feature embedded in the OBOR initiative. The whole or majority ownership acquisitions rose significantly, and an increasing number of state-controlled targets in the belt-road countries were acquired by Chinese enterprises. Our study provides evidence on the efficiency and efficacy of the state capitalism system in promoting international economic integration by encouraging both SOE and non-SOE acquirers to follow the blueprint of the government to go out. The OBOR ACCEPTED MANUSCRIPT
Image of page 38