Outward foreign direct investment by emerging market firms: A resource dependence logic

2013 ◽  
Vol 35 (9) ◽  
pp. 1343-1363 ◽  
Author(s):  
Jun Xia ◽  
Xufei Ma ◽  
Jane W. Lu ◽  
Daphne W. Yiu
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Resource Dependence ◽  
Emerging Market ◽  
Outward Foreign Direct Investment ◽  
Dependence Logic ◽  
Emerging Market Firms

Motives for foreign direct investment: a view from emerging market multinationals

2015 ◽  
Vol 23 (1) ◽  
pp. 77-86 ◽  
Author(s):  
Pavida Pananond
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Global Value Chains ◽  
Value Chains ◽  
Content Type ◽  
Emerging Market Multinationals ◽  
Emerging Market Firms ◽  
Selection Of

Purpose – The purpose of this paper explains how the framework on motives of foreign direct investment (FDI) needs to be rethought when analyzing emerging market multinational enterprises (EMNEs). It argues that the weak position of emerging market firms and their interdependent relationship with lead firms in global value chains (GVCs) modify the selection of internationalization motives. Design/methodology/approach – The arguments are illustrated through a critical review of the literature on FDI motives and a discussion on how the literature can be extended from looking through the lens of emerging market multinationals, particularly those with early development as suppliers in global value chains. Findings – The weak position of emerging market firms and their interdependent relationship with lead firms in global value chains modify the selection of internationalization motives on two aspects. First, internationalization decisions of EMNEs in GVCs are not undertaken in an independent manner. Rather, decisions are influenced by the initial position along the value chain and the dynamic relationships that these EMNEs have with lead firms. Second, the selection of FDI motives of these EMNEs reflects both their international expansion strategy and the upgrading effort they wish to pursue to undertake higher value-adding activities along the GVCs. Originality/value – These implications addressed in this paper add more nuances to the interpretation of FDI motives. Previously viewed mainly from the perspective of lead firms, FDI decisions are considered as independent alternatives that multinational enterprises (MNEs) can undertake to fulfill their internationalization strategy. Revisiting the FDI motives from the perspective of EMNEs reveals further insights on the interdependent nature of their internationalization, particularly reflecting the weaker position of EMNEs and their interdependent relationship with lead firms in their industry.

Determinants of financing of outward foreign direct investment by Indian MNEs

2018 ◽  
Vol 13 (5) ◽  
pp. 1154-1181 ◽  
Author(s):  
Vanita Tripathi ◽  
Sonal Thukral
Keyword(s):  
Foreign Direct Investment ◽  
Host Country ◽  
Direct Investment ◽  
Emerging Market ◽  
Credit Market ◽  
Market Development ◽  
Outward Foreign Direct Investment ◽  
Content Type ◽  
Parent Firm ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the determinants of financing the outward foreign direct investment (OFDI) by building a three-level framework residing on host country market imperfections, ownership advantages of parent firm investing abroad and the industry to which it belongs. Design/methodology/approach The paper used random effects probit model. Findings Parent debt financing of OFDI by Indian parent firms is driven by the credit market development of the host country, the uniqueness of the industry to which parent firm belongs and systematic risk. Debt-oriented firms are found to invest more via parent debt. Research limitations/implications The limitations of this study are as follows: –first, time period before 2008 could not be considered due to unavailability of data in the public domain. Second, the characteristics of foreign affiliates that spread across diverse host countries have not been factored in. Third, in the case of parent’s industry-level determinants, financial sector has not been included because the financing and risk-taking strategy of this sector are quite different from other sectors. Finally, the present study assumes financing decision to be centralized in the multinational system at the parent firm. Practical implications The practical implications of this study are as follows: first, industry innovativeness must be taken as a guide by the Indian MNEs to finance their OFDI and they must provide equity. Second, the study suggests that Indian MNEs rely on their existing capital structure while financing their OFDI. Third, parent firms are found to follow the industry norms. Fourth, parent firms must finance their OFDI by considering the development of credit market in the host country. Fifth, host government must focus on improving the credit market development of their economy and not just reducing tax rates to attract FDI into their economy. Originality/value Empirically examining internal flows in a multinational system has limited the research in the area of financing the OFDI. The paper is one of the first attempts to formally develop a model of factors that shape financing of OFDI in case of one such emerging market – India.

An Empirical Analysis on the Determinants of Outward Foreign Direct Investment of China through Diplomatic Distances

2018 ◽  
Vol 5 (3) ◽  
pp. 25-49
Author(s):  
Xing Shuai Wang ◽  
Kang Pil Cho ◽  
Yi Fang Cheng
Keyword(s):  
Foreign Direct Investment ◽  
Empirical Analysis ◽  
Direct Investment ◽  
Outward Foreign Direct Investment
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