CREC7's infrastructural investment in the DRC : an in-depth study of the motives for Chinese outward FDI

[摘要] ENGLISH ABSTRACT: The purpose of this Masters' thesis was twofold, namely, to contribute to a more holistic approach of the study of the motives of Chinese overseas investors and, secondly, to contribute to the adjustment of general FDI theory in such a way that it becomes more suited to the study of the motives of investors from any country of origin. FDI scholars who study emerging markets argue that general FDI theory needs to be adjusted because most of its theories are derived from studying outward FDI in an Anglo-Saxon context. The theories are therefore not necessarily applicable to investors from a non-Anglo-Saxon context. Furthermore, the study of the motives of foreign investors is of importance to policy makers of FDI host countries in order to create a balance between attracting FDI by deregulating, and controlling FDI by enforcing strict laws and regulations, thereby harnessing the full potential of incoming FDI. Therefore, the model that Lee (1966) developed in migration theory was introduced to FDI theory and tested by applying it to the case of the infrastructural investments in the DRC of a subsidiary of CREC, the world's largest contractor, namely CREC7. The main factors that influence the motives of CREC7 were investigated using the Four Factors Model, an adjusted version of Lee's model. A single-case study design was chosen in order to shed light on certain dynamics – in particular, the interrelation between the particular firm-specific, push, pull and intervening factors that influence CREC7's motives to invest in the DRC. In order to maximise the validity of this study, multiple sources of evidence were used, namely: documentation, face-to-face interviews and direct observations, the latter two of which occurred during August 2010. Lee's (1966) model indeed appeared to be useful for identifying the main factors that influence the motives of CREC7 for investing in the infrastructure sector in the DRC and the interrelatedness of these factors. The collected data from the desktop research and the fieldwork showed how conditions in the country of origin, conditions in the country of destination, firm-specific factors, and intervening factors influence each other in a highly complex way. In order to illustrate this complexity, the factors that influence each other most actively were grouped together in clusters. The two clusters of factors that were of specific importance for CREC7's decision to invest in the DRC, are: (1) relationship with the central government, access to finance, experience and skills, market access, and intervening factors; (2) experience and skills, experience of operating in a challenging institutional environment, high level of competition in the domestic market, high demand for infrastructure in the DRC, and the relatively low level of competition in large infrastructure projects in the DRC. Because the Four Factors Model uses broad categories of factors that apply to all foreign investors, this model can be applied to the study of the motives of foreign investors from both developed and developing countries, thereby contributing to make general FDI theory more relevant.

[发布机构] Stellenbosch University