The rapid growth of Chinese FDI is raising many concerns. The most important is the fear of predatory investments with a one-sided transfer of technology and other strategic assets from acquired Italian firms to China. New regulations in Europe and Italy add to this the risks to national security or public order arising from FDI in specific industries, particularly when the investor is controlled by the government of a third country. This is making the screening of inward FDI increasingly more restrictive. By using detailed post-acquisition performance data, we show that in the last decade Chinese acquisitions in Italy had an overall positive impact on target companies. The majority of them experienced an increase in turnover, employment, and other performance variables. Some case studies illustrate the factors that can turn a Chinese takeover into a success story. We also show how a more cautious attitude of the Italian government towards China is affecting Chinese investments in the country. In particular, the use of the so-called “golden power” has blocked or constrained some recent Chinese takeovers. Some political parties and stakeholders are pressing the government to extend the use of the “golden power” to block foreign acquisitions in "strategic" industries or national champions, even if there are no strict security reasons. This could significantly reduce the opportunities for Chinese investors in the future. On the other hand, greenfield investments are always welcome, but China probably needs more market appeal and technological updating to increase this type of investments in Italy and Europe.

Paba, S. e C., Parolini. "Chinese acquisitions in Italy: performance of target companies, political reactions and public perception, future prospects" Working paper, DEMB WORKING PAPER SERIES, Dipartimento di Economia Marco Biagi - Università di Modena e Reggio Emilia, 2021.

Chinese acquisitions in Italy: performance of target companies, political reactions and public perception, future prospects

Paba, S.;Parolini, C.
2021-01-01

Abstract

The rapid growth of Chinese FDI is raising many concerns. The most important is the fear of predatory investments with a one-sided transfer of technology and other strategic assets from acquired Italian firms to China. New regulations in Europe and Italy add to this the risks to national security or public order arising from FDI in specific industries, particularly when the investor is controlled by the government of a third country. This is making the screening of inward FDI increasingly more restrictive. By using detailed post-acquisition performance data, we show that in the last decade Chinese acquisitions in Italy had an overall positive impact on target companies. The majority of them experienced an increase in turnover, employment, and other performance variables. Some case studies illustrate the factors that can turn a Chinese takeover into a success story. We also show how a more cautious attitude of the Italian government towards China is affecting Chinese investments in the country. In particular, the use of the so-called “golden power” has blocked or constrained some recent Chinese takeovers. Some political parties and stakeholders are pressing the government to extend the use of the “golden power” to block foreign acquisitions in "strategic" industries or national champions, even if there are no strict security reasons. This could significantly reduce the opportunities for Chinese investors in the future. On the other hand, greenfield investments are always welcome, but China probably needs more market appeal and technological updating to increase this type of investments in Italy and Europe.
Dicembre
Paba, S.; Parolini, C.
Paba, S. e C., Parolini. "Chinese acquisitions in Italy: performance of target companies, political reactions and public perception, future prospects" Working paper, DEMB WORKING PAPER SERIES, Dipartimento di Economia Marco Biagi - Università di Modena e Reggio Emilia, 2021.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11380/1290450
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