The Great Leap Abroad. An Econometric Analysis of China's Global Quest for Energy Security.

It is argued that host country factors have predictive value for the completion of Chinese investment in overseas oil and gas assets, as well as for the value of such deals. Using this thesis’ unique dataset, which accounts for 198 states worldwide and the time period 1999-2012, four hypotheses are tested by performing ordered logit regression and Tobit regression analyses. Anticipating the results, the five main findings are presented here. For unambiguous interpretation, note that ‘Chinese investment’ refers to investment in overseas oil and gas assets. First, contrary to the impression obtained from media reports quoted above, Chinese investment is more likely to be accepted in states with institutional designs ranking higher in terms of institutional quality. Second, rentier states, whose leaders politically depend on the control over natural resources, do not take the expected defensive stance towards Chinese investments. Instead, a host country’s oil dependence is positively...Show moreIt is argued that host country factors have predictive value for the completion of Chinese investment in overseas oil and gas assets, as well as for the value of such deals. Using this thesis’ unique dataset, which accounts for 198 states worldwide and the time period 1999-2012, four hypotheses are tested by performing ordered logit regression and Tobit regression analyses. Anticipating the results, the five main findings are presented here. For unambiguous interpretation, note that ‘Chinese investment’ refers to investment in overseas oil and gas assets. First, contrary to the impression obtained from media reports quoted above, Chinese investment is more likely to be accepted in states with institutional designs ranking higher in terms of institutional quality. Second, rentier states, whose leaders politically depend on the control over natural resources, do not take the expected defensive stance towards Chinese investments. Instead, a host country’s oil dependence is positively related to not only deal completion per se, but also to the amount of money invested. Gas dependence, on the other hand, is not significant in any of the models presented here. Third, Chinese investment is not only more likely, but also granted in higher volumes, in states that rank higher in terms of creditworthiness. Fourth, the financial crisis has provided all three Chinese investors - the NOCs, CDB, and CIC - with an opportunity to increase chances of deal completion as well as the amount invested. Fifth, separate analyses for Asia indicate that Chinese investment follows different patterns in its regional neighborhood, highlighting the need for further research to build on this thesis.Show less

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The Great Leap Abroad. An Econometric Analysis of China's Global Quest for Energy Security.