How home and host country industrial policies affect investment location choice? The case of Chinese investments in the
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How home and host country industrial policies affect investment location choice? The case of Chinese investments in the EU solar and wind industries Augusto Ninni1 · Ping Lv2 · Francesca Spigarelli3 · Pengqi Liu2 Received: 13 February 2019 / Revised: 26 February 2020 / Accepted: 14 March 2020 © Associazione Amici di Economia e Politica Industriale 2020
Abstract The paper explores the influences played by asymmetries between European and Chinese incentive policies in renewable energy sources (RES) on location choice of Chinese investments in the EU. In the last decade, while EU countries relied on demand-oriented policies in the RES, China has been directly promoting supplyside interventions to support the domestic production of components. We advance the literature on determinants of Chinese investments abroad, by including relevant variables related to industrial selective policies of RES in home and host countries. By using a firm-level database from the Ministry of Commerce, we perform logit analysis, linking the features of Chinese photovoltaic (PV) and wind investments in EU to the supporting policies, as well as to institutional factors and endowments of resources in home regions and host countries. Our paper confirms the findings of previous studies, as far as institutional factors and country endowments impact on location choice. For selective policies we get interesting outcomes. The host EU countries have acted as catalyst for Chinese investments in Europe in search for market opportunities, while generous production subsidies at provincial level in China have discouraged Chinese investments abroad. Keywords Chinese investments · Solar and wind industry · Home country · Host country · Industrial policy · Location choice JEL Classification F23 · L52
* Ping Lv [email protected] 1
Dipartimento di Scienze Economiche e Aziendali, University of Parma, Via J. Kennedy, 6, Parma, Italy
2
University of Chinese Academy of Sciences, No. 80 Zhongguancun East Road, Beijing 100190, China
3
University of Macerata, Piaggia dell’Universita, Macerata, Italy
13
Vol.:(0123456789)
Journal of Industrial and Business Economics
1 Introduction Recently, the debate about the role and impact of selective industrial policies, i.e. targeting selected companies, regions and territories or specific industries (Lall and Teubal 1998; Gereffi 2013) has re-gained attention among scholars (McGillivray 2018) and policy makers (Aghion et al. 2015). This is due also to unpredictable protectionist measures implemented by major global economic players—US in primis—to protect specific sectors or preserve local companies’ competitiveness (Di Tommaso et al. 2019). Indeed, not only protectionist measures might influence the global competition in key economic sectors, but also the use of different/asymmetric selective policies, targeting the same industry, could impact on trade and investments. We define as asymmetric those policies that tend to promote the same goals, but stimulating different and opposite forces of the market, na
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