Chinese Outward Direct Investment in Global Alternative Energy Sector: An Empirical Study Using Project Level Data

Abstract

China has been an emerging investor in global energy industry. Different from Chinese investments in traditional energy sectors which seek natural resources and energy security for China, Chinese overseas investments in the alternative energy sector will benefit the recipient countries by facilitating clean energy utilization and alternative energy products export. In this paper, the determinants of Chinese outward direct investment (ODI) pattern in global alternative energy sector is investigated using a project-level data set. With a Probit regression model, it is found that younger Chinese firms are more prone to Greenfield investments rather than Merge and Acquisition (M&A), while underdeveloped and risky regions are not favorable for Greenfield investments. This work combines project-level data with quantitative analysis and makes a contribution to understanding Chinese ODI landscape in global alternative energy sector.