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The Impact of the Global Financial Crisis on the Presence of Chinese and Indian Firms in Europe
| Françoise Hay, Christian Milelli & Françoise Hay |
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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.
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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.
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Foreword
The Authors Acknowledgements
List of Boxes, Case Studies, Figures and Tables
1 Introduction
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
References
Index
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| ‘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 |
Publication Details
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Paperback ISBN: |
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978-1-84519-508-3 |
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Page Extent / Format: |
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96 pp. / 229 x 152 mm |
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Release Date: |
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September 2011 |
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Illustrated: |
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No |
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Paperback Price: |
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£16.95 / $24.95 |
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| This book can be ordered online or by telephone. |
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For the UK and Rest of the World:
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tel. 44 (0)1524-68765 |
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tel. (1) 503 287-3093 or (800) 944-6190 |
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