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Chinese outward FDI in the terminal concession of the port of Piraeus

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Abstract

Business literature has broadly identified four main perspectives in motivating and affecting Chinese outward foreign direct investment (OFDI). In particular (a) the latecomer perspective, (b) the Chinese state and government influence perspective, (c) the liability of foreignness and (d) the dynamics of firms and institutions perspective. In this paper, we focus on the concession of the container terminal of Pier II of the port of Piraeus as a case study of Chinese OFDI. Our analysis indicates that in the concession of the port of Piraeus, most of the drivers of Chinese OFDI are present. We support the view that the process was necessitated by the “latecomer” disadvantage of the Chinese shipping companies but was primarily driven by the influence of the Chinese and Greek State. In the case of the concession of the Piraeus container terminal, the governmental influences on the process affected the longevity and application of the contractual arrangement and include political deals alongside the business one.

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... When the receiving State cannot facilitate investment loans, sovereignty is put at risk (Malhi, 2018). The fact that State-Owned Enterprises (SOEs) conduct the majority of Chinese outward FDI (Deng, 2013) with strong political influence on the investment decision (Karlis and Polemis, 2018) raise additional security concerns for the possibility to create political dependency (Jiang, 2009). These fears had been fired up after the port of Hambantota port in Sri Lanka was signed over on a 99-year lease to China Merchants Port Holdings due to debt repayment difficulties and was used as a base for a Chinese submarine (Singh, 2015). ...
... Scholars have broadly conducted two main perspectives in motivating and affect international trade flow. In the perspective of location decision factors, based on the resource dependence theory proposed by Pfeffer and Salancik (1978), recent empirical literature emphasizes the role of market size, economic development, technological development, EF, and location advantage in the host countries (Kapuria-Foreman 2007; Karlis and Polemis 2018;Subasat and Bellos 2011;Yang 2018;Yang et al. 2018). For instance, Yang et al. (2018) investigate that Chinese multinationals are prone to locate their investments in countries with less economic development and more natural resources, which was motivated by higher investment return and access to cheaper resources. ...
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In this paper, we describe the capabilities and strategies required for obtaining a concession to operate a terminal in a seaport. The extent to which concession procedures create entry barriers and lower the contestability of the market is assessed. Recent studies and policy initiatives have stressed the importance of lowering economic, institutional, and locational entry barriers in seaports. Concession procedures have an effect on market entry. Tenders may lower entry barriers by ensuring transparency, restricting discrimination and exclusivity, and limiting concessions to certain periods. However, tender procedures may also introduce entry barriers in a number of ways, including the requirement of capabilities and track records to win a tender. This paper examines relevant empirical material of recently completed or intended concessions in major European ports to evaluate these issues. Maritime Economics & Logistics (2008) 10, 209–228. doi:10.1057/mel.2008.1
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Past literature on foreign direct investment generally supports an economics perspective that there is a direct relationship between firm-specific ownership advantages and international expansion. However, in emerging economies, with their institutional environment context characterized by low resource munificence and continuous economic liberalization, a theoretical extension of the current perspective is needed. This paper introduces new parameters by focusing on specific ownership advantages and strategic actions that firms have to develop in response to the institutional characteristics of the emerging economies when they decide to pursue outward FDI. The focus here is on international venturing that requires a firm to engage in activities for new business creation in a foreign country rather than simply seek to distribute a product in another nation. It is shown empirically that the relationship between firm-specific ownership advantages and international venturing is moderated by the degree of home industry competition and export intensity. In addition, such a relationship is mediated by the intensity of corporate entrepreneurial transformation in the form of innovation, new business creation, and strategic renewal. Journal of International Business Studies (2007) 38, 519–540. doi:10.1057/palgrave.jibs.8400278
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Political behavior by MNEs has usually been ignored, downplayed or passively treated in dominant economic models of the multinational enterprise. In order to remedy this lacuna. Dunning's eclectic paradigm is expanded to integrate political dimensions in the analysis of ownership, internalization and location advantages.© 1988 JIBS. Journal of International Business Studies (1988) 19, 341–363
Article
The relationship between Internationalization and performance is a challenging topic for the agenda of researchers across the world, due to the complexity of the variables involved, to the difficulties in construct building and, last but not least, to the controversial results arising from the different studies that have been conducted on the matter in recent decades. This is particularly true in the case of SMEs, which represent a field still to be explored from this point view. The fundamental hypothesis that has driven the present work is that the growing level of market integration has generated a framework of international competition for economic actors which has to be considered as the actual natural environment both for international and for domestic firms. As a consequence, being international is no more than a natural status for the enterprise, in the sense that firms which have not engaged yet in international markets are also part of a competitive international environment that influences strategic decisions and contributes to shaping business models and performances accordingly. This concept applies immediately to those regions where the integration process has gone further and deeper, for example the European Union area, where the domestic market for economic actors has gradually evolved from the former national base to a European one. The empirical study, based on 220 Italian firms, performance - measured by profitability ratios - is not determined by the degree of internationalization in terms of classical export intensity and number of international agreements, but depends mainly on the ability of firms to gain access to specific markets such as the American one. Moreover, SMEs which have grown in foreign markets through FDI show a lower profitability, showing the existence of a "liability of foreignness" effect at the beginning of their international growth. Howeverthis negative effect can be reduced when SMEs have already developed inter
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