Chinese FDI strategy in Italy: The 'Marco Polo' effect

Abstract

This study investigates the motivations driving Chinese outward direct investment to Italy. The analysis is based on secondary sources and in-depth interviews with key informants and senior managers of Chinese affiliates in Italy. The evolution of the Chinese firms' pattern of entry in Italy confirms the model followed by Chinese firms in other European countries, but we obtain some additional interesting results. Chinese investments in Italy are increasingly targeting the acquisition of technological capabilities and of design skills and brands to tap local competences available in specialised manufacturing clusters in sectors such as automotives and home appliances. They try to link, leverage and learn from foreign acquisitions. The main industries of specialisation of Chinese OFDI in Italy reflect this approach and appear to be related to China's strategy to increase the sophistication of its exports and to move away from standardised commodities and intermediate manufactures and components.