Chinese investment in overseas container terminals : the role of investor attributes in achieving a higher port competitiveness

Abstract

Chinese companies have invested in over 100 overseasports during the last two decades, but their contribution to the competitiveness of local terminals remains unknown. In contrast to previous qualitative geopolitical interpretations of China-labeled port projects, this study empirically examines how investor characteristics associated with China affect the throughput evolution and market shares of the individual container terminals. The key focus is on terminal performance to neutralize the influence of non-Chinese investors in focal ports with several terminals. Panel data from 2008 to 2019 are analyzed using pooled regression for 68 overseas container terminals operated by three Chinese international port operators (COSCO Shipping Ports, China Merchants Holdings International, and Hutchison Ports). The regression results indicate that the focal container terminal's market share would gain from being a state-owned firm, owning a vessel fleet, and having a greater stake in the project. On the other hand, shareholder complexity may have a detrimental effect on the terminal's competitiveness. An intriguing finding is that investments in politically insecure areas with fewer regional ports are more likely to result in increased market share for state-owned firms. These findings have management implications for businesses and add to the body of knowledge on foreign port investment.