Excellence in Scholarship and Learning
The Impact of the Global Financial Crisis on the Presence of Chinese and Indian Firms in Europe
Françoise Hay, Associate Research Fellow at the Centre de Recherche en Economie et en Management (National Centre for Scientific Research and University of Rennes 1).
Christian Milelli, Research Fellow at EconomiX (National Centre for Scientific Research and University of Paris West, Nanterre).
Yunnan Shi, Senior Lecturer at the University of Rennes 1 and Researcher at the Centre de Recherche en Economie et en Management.
This book investigates the presence of Chinese and Indian companies in Europe and the impact that the current global financial crisis has had on their corporate behaviour and strategies. Have investments been canceled or postponed? Has the crisis created new opportunities for investment? Is the behaviour of Chinese and Indian firms to these new circumstances similar? In addressing these challenging questions the authors used a proprietary data base encompassing more than 1,500 investments (greenfield operations, mergers-and-acquisitions, joint ventures, horizontal/vertical extensions) made throughout Europe by companies from China (Mainland and Hong Kong) and India since the 1990s. Comparisons were made according to several criteria – e.g. spatial patterns, modes of entry, sector and function distribution – to pinpoint differences and likenesses. In addition, face-to-face interviews were conducted in order to elaborate congruent case studies in traditional sectors (textile/clothing), or in new sectors (software for Chinese companies).
The crisis had an impact on both investors in the following terms: lower amounts of investment, more merger-and-acquisition deals in absolute and relative terms, more focus on the largest economies (particularly the UK), and a targeting of specific assets such as critical technologies, international management capability, renowned brands and sale networks. In conclusion, in the years following the global financial crisis Indian investments in Europe have been more significantly affected than Chinese investments due, to a large extent, to the support of the Chinese state.
|Paperback Price:||£16.95 / $24.95|
|Release Date:||September 2011|
|Page Extent / Format:||96 pp. / 229 x 152 mm|
The Authors' Acknowledgements
List of Boxes, Case Studies, Figures and Tables
2 Chinese and Indian Outward Foreign Direct Investments during the Crisis Years: A micro economic perspective
2.1 The impact of the global crisis on the Chinese and Indian economies
2.1.1 In China
2.1.2 In India
2.1.3 The contrasting international investment position of China and India
2.2 Mergers and Acquisitions made by Chinese firms worldwide during the crisis period
2.2.1 Geographical distribution of Chinese M&As
2.2.2 Sectoral distribution of Chinese M&As
2.2.3 Commitment levels
2.3 Mergers and Acquisitions by Indian firms worldwide during the crisis period
2.3.1 Geographical distribution of Indian M&As
2.3.2 Sectoral distribution of Indian M&As
2.3.3 Commitment levels
3 European Investments by Chinese and Indian Firms in the Financial Crisis
3.1 A contrasting situation between the two categories of investors
3.1.1 The Chinese investments which have intensified in Europe despite the crisis
3.1.2 But the Chinese firms are already more cautious when making their investment decisions
3.1.3 The Indian investments which are contracting
3.1.4 Europe remains attractive for both investors
3.1.5 These investments are growingly targeted by European public authorities
3.2 The main characteristics of Chinese and Indian investments made during the financial crisis in Europe
3.2.1 Lower amounts
3.2.2 The rise in equity investments and M&As
3.2.3 United Kingdom, France and Germany remain the leading destinations in Europe
3.2.4 A contrasting sectoral distribution
3.3 The global economic crisis provided opportunities for Chinese and Indian investors in some sectors and activities
3.3.1 Rising investments in the European automotive sector
3.3.2 The creation of numerous bank branches and other financial establishments by Chinese and Indian companies
3.3.3 The emergence of a truly software sector by Chinese firms
3.3.4 The climbing of the value chain for the Chinese textile-clothing sector
3.3.5 The breakthrough by Chinese investments in renewable energies
3.3.6 A new look at installations in Central European countries
3.4 The resilience of Chinese and Indian pre-crisis investments in Europe
3.4.1 Good resistance to the crisis for some sectors
3.4.2 Recovery after initial difficulties
3.4.3 Mixed results for other sectors
4 Outcomes and Prospects
As outward investment from the non-triad countries continues to increase its share of global outward investment, it is important to understand the extent to which such investment is sustained in the triad host regions and countries, and how such investment ventures evolve over time. This is necessary in order to assess the impact of such investment on host societies. Such understanding is also of benefit to home country firms contemplating and planning strategies for overseas investment. Exploring the effects of the global financial crisis on such investment is a crucial element in seeking to estimate future investment flows and their likely impacts.
Louis Brennan, Proposer and Chair, COST Action IS0905 (European Cooperation in Science and Technology) on ‘The Emergence of Southern Multinationals and their Impact on Europe’, and Director of the Institute for International Integration Studies, and Associate Professor in the School of Business at Trinity College, Dublin, Ireland
Reviewed by the Journal of Economic Literature (American Economic Association)
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