A Systematic Literature Review on Mergers, Acquisitions, and other Foreign Direct Investment by Chinese Firms in the EU

Over the past 20 years, Chinese investments in the EU have significantly increased. Although such investments support the revival of the economy, also several concerns have surfaced. These often relate to matters of unfair competition and national security. This paper employs a PRISMA methodology to systematically analyse the literature on M&A and other FDI made by Chinese companies in the EU and to present a neutral overview of the current state of the art. Our research delves into: i) the theoretical frameworks that have been applied, ii) the motivations of Chinese companies to engage in M&A and FDI in the EU, iii) the effects that have been studied, iv) which types of Chinese firms engage in M&A and FDI in the EU, the role of government support, the affected industries and timeframes, and v) the empirical methods and data. Our main conclusions point to the continued use of Dunning's OLI and motivation theories as the primary theoretical frameworks. Chinese companies seem mainly driven by market access, growth, and supply chain opportunities, while also political motives are extensively discussed. The literature reports substantial financial support from the Chinese government as an enabling factor. Following recent geopolitical changes, the EU is increasingly monitoring Chinese investments in light of security, strategic autonomy and fair competition.