This study extends Dunning’s location paradigm by incorporating the host country’s global value chain (GVC) position as a distinct motivation for outward foreign direct investment (OFDI). We empirically disentangle this GVC-seeking motive from strategic asset-seeking using horserace tests. Analyzing 320 Chinese OFDI events across 31 OECD countries (2005–2014), we find that higher GVC positions (GVCPs) significantly attract investment, validating our theoretical extension. Conversely, labour-seeking OFDI targets lower GVCPs, an effect moderated by host country development. Firm heterogeneity analysis reveals that the GVC-seeking effect is stronger for non-state-owned, large and technology-intensive firms. Validating with 2015–2023 data, we confirm the positive GVCP influence, though it is marginal in non-US samples and overshadowed by US geopolitical factors. Moreover, OECD GVC hierarchies remain stable (Spearman’s ρ > 0.91, 2014–2023). These findings, extendable to other emerging-market multinationals, enrich GVC and OFDI literature and offer strategic insights for China’s economic transformation.
Wu et al. (Mon,) studied this question.