This study examines and extends the resource dependence logic of diversification for a better understanding of outward foreign direct investment (OFDI) activities by emerging market firms. We contend ...that the diversification logic is bounded by state ownership, an important but less considered component of interdependence. Our empirical results, based on panel data analysis of Chinese listed firms, suggest that the level of interdependence between Chinese and foreign firms in China in multiple forms, including symbiotic, competitive, and partner interdependencies, is positively associated with the level of the Chinese firms' OFDI activities. However, Chinese firms with higher levels of state ownership are less susceptible to the pressures imposed by foreign firms to invest abroad.
The choice of location of foreign direct investments (FDI) by multinational enterprises (MNEs) has been the subject of intense scrutiny for decades and continues to be so. Yet, the vast diversity in ...methodological approaches, levels of analysis, and empirical evidence precludes a comprehensive understanding of the phenomenon. We review and evaluate 153 quantitative studies on FDI location choice over four decades from 1976 to 2015 across multiple disciplines, including international business, management, economics, urban and regional studies, and economic geography. Our review provides a comprehensive analysis of the empirical evidence and methodological implications to guide future empirical research on FDI location choice.
•Our analyses are based on 96 publicly listed high-tech Chinese enterprises over the 2001–2012 period.•OFDI acts as a vehicle for the organization learning for EMEs.•EMEs’ OFDI positively affects ...innovation performance.•The innovation-enhancing effect of OFDI is higher when it is undertaken in developed host countries.
Although prior research conceptualizes how knowledge-seeking motivates the internationalization of emerging-market enterprises (EMEs), whether outward foreign direct investment (OFDI) indeed leads to enhanced innovation performance has received limited attention. We address this subject by conceptualizing how Chinese EMEs’ OFDI enhances their subsidiaries’ organizational learning and innovation performance and whether geographic location choices influence this relationship. Our panel data analysis of Chinese EMEs shows that OFDI has a positive effect on innovation performance of Chinese EMEs’ subsidiaries and that this effect is stronger when the OFDI is directed towards developed rather than emerging countries. These findings advance the notion that EMEs can use OFDI as a strategy to globalize R&D and enhance their innovation performance and demonstrate that certain established assumptions regarding organizational learning are not valid for EMEs.
The world has been rapidly globalizing, starting with communication protocols in 1970 and continuing today with internet technologies, and in the future, tools known as artificial intelligence and ...the metaverse. It is observed that technological change, especially in a high-uncertainty and hyper-competitive environment, has transformed more rapidly compared to past decades, directly affecting daily lives. This environment is described as economic, financial, and commercial globalization for companies and governments. Governments' development policies are encouraging companies that are Glocalization (think globally, act locally), transitioning from local to global, and benefiting the local areas, aligned with the investment strategies of companies in the home country. Our study examines concepts and relationships through a literature review within the theoretical framework of Dunning's eclectic paradigm, Porter's diamond model, Williamson's transaction cost theory, and strategic behavior theories. In the mentioned competitive environment, companies make their investment decisions outside their home countries considering four motives (resource seeking, efficiency seeking, market seeking, and strategic asset seeking). The aim of this study is to explain, from a competition perspective, why companies that want to gain competitive advantage in a globalizing world or avoid competition in the domestic market are investing out of their home countries. Planned to be conducted in 61 countries across 6 continents, according to the OECD classification, this study aims to contribute both to the companies' outward foreign direct investment decisions and to policymakers' process of creating sustainable development policies.
Green innovation (GI) is an important way to realize the sustainable development. This paper contributes to the existing literature by analyzing the effects of different environmental regulations on ...green innovation from a heterogeneous perspective. We also compare the impacts of indigenous innovation input and foreign technology spillover on green innovation. The dataset of this paper covers a panel of China's 30 provinces from 2003 to 2017. The results of Systematic Generalized Method of Moments (SYS-GMM) show that command-and-control regulation (CER) and informal regulation (IER) have significant “Porter's effect” on green innovation while market-based regulation (MER) negatively affects green innovation in China. Inward foreign direct investment (IFDI) plays a positive role in developing China's green innovation thus, validating the “Pollution Halo hypothesis”. Outward direct investment (OFDI) has a reverse green technique effect on China's green innovation. In addition, the positive effect of indigenous innovation input on green innovation is larger than that of foreign technology spillover from IFDI and OFDI. Moreover, the strengthening of CER weakens the positive effect of IFDI on green innovation. By contrast, the increase of IER can promote the reverse green technology spillover effect of OFDI on green innovation. On the basis of results, the government should attract green inward FDI and invest on foreign technology-intensive industries to obtain green technology spillover and stimulate green innovation.
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•Command-and-control and informal regulation have significant “Porter's effect”.•Market-based regulation negatively affects green innovation in China.•Inward FDI exerts “Pollution halo effect” on China's green innovation.•Outward FDI has a reverse green technique effect on China's green innovation.
This paper uses time-varying Bayesian models to assess the impact of the shifting, and progressively more volatile (especially since the EU Referendum vote in 2016) macroeconomic landscape on Foreign ...Direct Investment (FDI) inflows to the UK. FDI inflows are depressed in response to higher UK-specific economic and geopolitical uncertainty. A stronger real exchange rate and a higher interest rate also have a negative effect. It benefits from lower UK corporate tax rates and higher US uncertainty, the latter creating investment opportunities in the UK. Rising economic policy uncertainty since the EU Referendum, has led to FDI losses of up to 0.5% of GDP.
•Economic uncertainty reduces UK FDI.•A stronger real exchange rate reduces UK FDI.•UK FDI benefits from lower UK corporate tax rates relative to world ones.
International trade, together with foreign direct investment (FDI), promotes economic integration with complex global supply value chains, which is now recognized as a crucial factor in determining ...CO2 emissions. Production reallocation across countries, often associated with FDI, promotes cross-border trade of emission-embodied products. By applying panel pooled mean group-autoregressive distributive lag (PMG-ARDL) models, this study discusses the long-run relevance among CO2 emissions, international trade, and FDI inflows with the consideration of the short-run dynamics over 52 countries during the period from 1991 to 2014. Focusing on possible differences between developed and the developing countries, this study reveals that CO2 emissions have a negative long-run relationship with trade exclusively for developed countries, while they have a positive long-run relationship with FDI inflows solely for developing countries. The recent trend of increased trade and FDI would promote the transfer of high emission-intensive production units from developed countries to developing countries, causing developed countries to achieve emission reduction at the expense of developing countries.
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•Linkages among CO2 emissions, international trade, and FDI inflows are investigated.•A sample of 52 developed and developing countries are analyzed for the period 1991–2014.•A positive long-run relationship exists between CO2 emissions and FDI inflow exclusively for low-income countries.•A negative long-run relationship exists between CO2 emissions and trade openness solely for high-income countries.
Using the Antecedents, Decisions and Outcomes (ADO) format as an organizing framework, this article gives an overview of the literature on different dimensions and characteristics of outward foreign ...direct investment (OFDI) by firms from emerging countries. Based on an extensive coverage of studies published over a period of nearly 25 years between 1993 and 2017, we review extant research on this phenomenon from mainly China, as well as other emerging countries. We identify advances and analytical areas of OFDI research and pinpoint the key theories, methodologies, observed characteristics and the variables that have been examined in this growing research literature. Many areas of the above research themes remain underexplored, despite recent significant advancements, and may provide directions for future research.
In this perspective paper we argue that outward foreign direct investment (OFDI) undertaken as escape response to perceived misalignment between firm needs and home country institutional conditions ...represents an important but under-explored phenomenon in the international business (IB) literature. We propose that, in advanced industrialized nations, the extent of OFDI as escape is likely to rise with the extent of societal coordination in the political economy. Societal coordination is associated with relatively slower rates of institutional adjustment and thus with relatively greater prevalence of misalignments that may drive OFDI. We illustrate the face validity of our argument and lay out the implications for future research in IB.
This study addresses an apparent impasse in the research on organizations’ responses to cultural distance. We posit that cross-country differences in egalitarianism—a cultural orientation manifested ...in intolerance for abuses of market and political power and support for protection of less powerful actors—affect multinational firms’ choices of destinations for foreign direct investment (FDI). Using historically motivated instrumental variables, we observe that egalitarianism distance has a negative causal impact on FDI flows. This effect is robust to a broad set of competing accounts, including the effects of other cultural dimensions, various features of the prevailing legal and regulatory regimes, other features of the institutional environment, economic development, and time-invariant unobserved characteristics of origin and host countries. We further show that egalitarianism correlates in a conceptually compatible way with an array of organizational practices pertinent to firms’ interactions with nonfinancial stakeholders, such that national differences in these egalitarianism-related features may affect firms’ international expansion decisions.
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