Expansion of Chinese companies to European stock exchanges

Abstract

The growing importance of China in the global economy, particularly in production, trade, and finance, has led Chinese companies to become increasingly active in international capital markets. One key manifestation of this trend is raising capital through Initial Public Offerings (IPOs), which are increasingly conducted on foreign stock exchanges. Listing abroad enables firms to access diversified financing sources and enhance their international credibility, representing an important stage of their internationalisation.

This dissertation aims to identify the factors influencing Chinese companies’ decisions to list on European stock markets. It focuses on firms from Mainland China and examines their presence in Europe within broader economic and institutional contexts.

The main hypothesis assumes that non-economic factors play a decisive role in these decisions. Supporting hypotheses are divided into two groups: economic factors (such as capital needs, growth, profitability, and investor access) and institutional factors (including legal systems, political environment, cultural conditions, and domestic constraints in China).

The empirical study covers 2002–2022 (with robustness checks until 2023) and includes a sample of 118 companies, constructed using Propensity Score Matching. Quantitative methods were applied to test economic factors, while institutional aspects were analysed using qualitative approaches.

The results show that economic factors are not the primary drivers of European listings. Instead, institutional conditions in Europe and regulatory constraints in China play a crucial role. The study contributes to the literature by highlighting the importance of institutional determinants and offers practical insights for policymakers, regulators, and investors.