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I thought we were on the same team? A study on the differences between investments from Chinese private and state-owned enterprises into Africa on an institutional level

Aghai Vafaei, Adrian LU (2026) STVK04 20252
Department of Political Science
Abstract
Outbound foreign direct investments by developing economies has become an
important subject in international business. However, much of the research has
attempted to model firms entering foreign markets from emerging economies using
the same models developed for advanced economies, which limits what can be
inferred. This gap suggests that other approaches are needed. One such approach is
analyzing these investments through institutional theory, particularly in the context
of China. Since the beginning of the 21st century, China has increased its
engagement with African countries through institutional levers that direct and
influence state-owned and privately-owned enterprises alike. Building on the
premise that standard FDI... (More)
Outbound foreign direct investments by developing economies has become an
important subject in international business. However, much of the research has
attempted to model firms entering foreign markets from emerging economies using
the same models developed for advanced economies, which limits what can be
inferred. This gap suggests that other approaches are needed. One such approach is
analyzing these investments through institutional theory, particularly in the context
of China. Since the beginning of the 21st century, China has increased its
engagement with African countries through institutional levers that direct and
influence state-owned and privately-owned enterprises alike. Building on the
premise that standard FDI theories are insufficient, this thesis applies a theory-
driven institutional framework using a qualitative process-tracing design and a
comparative analysis of state-owned and privately-owned investments. By
operationalizing institutional causal mechanisms as push and pull factors, the
findings conclude that state-owned enterprises (SOEs) are strongly shaped by
institutional and political logic more than market logic through push factors, while
privately owned enterprises (POEs) follow market logic but are drawn by host-
country institutional pull mechanisms. Furthermore, the thesis challenges the
narrative that Chinese SOEs are inherently more attracted to riskier markets by
showing how SOEs maneuver through the investment process to reduce risks such
as embezzlement of funds. (Less)
Please use this url to cite or link to this publication:
author
Aghai Vafaei, Adrian LU
supervisor
organization
course
STVK04 20252
year
type
M2 - Bachelor Degree
subject
keywords
institutions, foreign direct investments, China, process-tracing, Africa
language
English
id
9217191
date added to LUP
2026-01-26 11:51:16
date last changed
2026-01-26 11:51:16
@misc{9217191,
  abstract     = {{Outbound foreign direct investments by developing economies has become an
important subject in international business. However, much of the research has
attempted to model firms entering foreign markets from emerging economies using
the same models developed for advanced economies, which limits what can be
inferred. This gap suggests that other approaches are needed. One such approach is
analyzing these investments through institutional theory, particularly in the context
of China. Since the beginning of the 21st century, China has increased its
engagement with African countries through institutional levers that direct and
influence state-owned and privately-owned enterprises alike. Building on the
premise that standard FDI theories are insufficient, this thesis applies a theory-
driven institutional framework using a qualitative process-tracing design and a
comparative analysis of state-owned and privately-owned investments. By
operationalizing institutional causal mechanisms as push and pull factors, the
findings conclude that state-owned enterprises (SOEs) are strongly shaped by
institutional and political logic more than market logic through push factors, while
privately owned enterprises (POEs) follow market logic but are drawn by host-
country institutional pull mechanisms. Furthermore, the thesis challenges the
narrative that Chinese SOEs are inherently more attracted to riskier markets by
showing how SOEs maneuver through the investment process to reduce risks such
as embezzlement of funds.}},
  author       = {{Aghai Vafaei, Adrian}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{I thought we were on the same team? A study on the differences between investments from Chinese private and state-owned enterprises into Africa on an institutional level}},
  year         = {{2026}},
}