Advancing research on the determinants of Indian MNEs: the role of sub-national institutions

2018 ◽  
Vol 13 (3) ◽  
pp. 536-556 ◽  
Author(s):  
Rishika Nayyar
Keyword(s):  
Foreign Direct Investment ◽  
Conceptual Framework ◽  
Direct Investment ◽  
Empirical Studies ◽  
National Level ◽  
State Level ◽  
Outward Foreign Direct Investment ◽  
Outward Fdi ◽  
Indian States ◽  
Content Type

Purpose The purpose of this paper is to provide directions for advancing the research on determinants of outward foreign direct investment (FDI) from India. Design/methodology/approach The paper uses literature review as a method to identify a research gap in the literature on internationalization of Indian firms. Findings The synthesis of the theoretical debate and empirical studies conducted in context of EMNEs, with a particular focus on India and preliminary examination of data on cross-border acquisitions as well as institutions in India lead us to argue for the consideration of institutions at sub-national level (Indian states) in examining the determinants of outward FDI from India. The paper also proposes a conceptual framework relating to the mechanism through which institutions at the state level in India affect the propensity of firms to invest overseas. Research limitations/implications Since the propositions are not tested empirically, the paper does not provide conclusive results. Originality/value In addition to providing the synthesis of the theoretical debate and empirical studies, paper is, to the best of author’s knowledge, the first one to present a conceptual framework relating institutions at sub-national level with the outward foreign direct investment from India.

scholarly journals The motives for Japanese foreign direct investment in the Southeastern United States

2019 ◽  
Vol 11 (4) ◽  
pp. 324-338
Author(s):  
Remy Magnier-Watanabe ◽  
James Hoadley
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
National Level ◽  
State Level ◽  
Industrial Clusters ◽  
Southeastern Usa ◽  
Content Type ◽  
The Usa ◽  
Japanese Fdi ◽  
Japanese Companies

Purpose Whereas the USA is still the largest investment destination for Japanese companies, Japan also accounts as the second largest source of investment in the country. The purpose of this paper is to, empirically, examine the detailed motives of Japanese affiliates when investing in the Southeastern USA, adding to previous research at the national level. Design/methodology/approach This paper uses a qualitative approach based on the interviews of long-term Japanese investors in the manufacturing and wholesale trade industries in the Southeastern USA and applies text analysis to identify their motives. Findings The results show that Japanese firms engage in market- and efficiency-seeking foreign direct investment (FDI), and still apply a classic sequence of gradual and incremental market commitments. Market size and growth rate, reducing transaction or transportation costs, and integration within local value chains are the most important to them, whereas competition, creating an export base, lowering tax and accessing skilled labor are of little concern. Practical implications The goal of Japanese FDI in the USA is no longer to bypass tariffs but is still part of a complex industrial network of relations which drives further investment. This result can inform policy makers at the state level about the factors that can drive additional foreign investment, such as the establishment of industrial clusters. Originality/value This study offers current insights into the motives of Japanese FDI in two industries.

Country-level macro-corporate governance and the outward foreign direct investment

2018 ◽  
Vol 45 (1) ◽  
pp. 107-123 ◽  
Author(s):  
Tong Tong ◽  
Tarlok Singh ◽  
Bin Li
Keyword(s):  
Corporate Governance ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
National Level ◽  
Political Stability ◽  
Outward Foreign Direct Investment ◽  
Host Countries ◽  
Data Set ◽  
Content Type ◽  
Country Level

Purpose China’s outward foreign direct investment (ODI) has become a recent phenomenon in that China is now rated as the world’s third largest country for ODI. Previous studies have found that China’s ODI is driven by the attractions of natural resources and overseas markets. Yet these studies have ignored the role of corporate governance at a national level, the paper aims to discuss these issues. Design/methodology/approach The Kaufmann et al. (1999) data set is used in our study and the data sample have covered the period from 2003 to 2012 for a comprehensive set of 171 host countries. Random effects model are applied in the paper and population average model is used to check the robustness of the results. Findings The authors find that the effects of macro-corporate governance are distinct in different sample periods, as well as in geographical and economic regions, when attracting China’s ODI. Indicators such as political stability, the absence of violence, regulatory effectiveness, regulatory quality, the rule of law and the control of corruption are found to be positively related to China’s ODI. Originality/value This is one of the first papers to investigate the relationship between macro-corporate governance indicators and China’s ODI. 171 countries are included in the data sample and sub-sample tests are also conducted.

Chinese outward foreign direct investment

2018 ◽  
Vol 34 (4) ◽  
pp. 10-12
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Design Methodology ◽  
Reading Time ◽  
Outward Foreign Direct Investment ◽  
Foreign Markets ◽  
Content Type ◽  
Pertinent Information ◽  
Strategic Motives ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings This briefing looks at the strategic motives behind Chinese firms when looking to expand globally and create subsidiaries in foreign markets. Originality/value The briefing saves busy executives, strategists, and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

scholarly journals The Pitfalls of Using Foreign Direct Investment Data to Measure Chinese Multinational Enterprise Activity

2014 ◽  
Vol 221 ◽  
pp. 21-48 ◽  
Author(s):  
Dylan Sutherland ◽  
John Anderson
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Empirical Studies ◽  
Multinational Enterprise ◽  
Outward Fdi ◽  
Tax Havens ◽  
Chinese Mnes ◽  
Enterprise Activity ◽  
Business And Management

AbstractThe growth of Chinese multinational enterprises (MNE) has stimulated great interest in their outward foreign direct investment (FDI) strategies, particularly among academics in business and management studies. To date, however, serious methodological shortcomings plague empirical studies in these disciplines. Specifically, the vital issue of how Chinese MNEs use and route FDI via tax havens and offshore financial centres is not adequately dealt with. These practices have created large geographical, industrial composition and volume biases in Chinese outward FDI data. Using a sample of 100 Chinese MNEs, we illustrate how the use of tax havens and offshore financial centres has created these biases, and examine the implications for understanding Chinese MNE activity.

scholarly journals Emerging Economy Inward and Outward Foreign Direct Investment: A Bibliometric and Thematic Content Analysis

2021 ◽  
Author(s):  
Keilla Dayane da Silva-Oliveira ◽  
Edson Keyso de Miranda Kubo ◽  
Michael J. Morley ◽  
Rodrigo Médici Cândido
Keyword(s):  
Foreign Direct Investment ◽  
Performance Analysis ◽  
Emerging Economies ◽  
Thematic Analysis ◽  
Direct Investment ◽  
Institutional Environment ◽  
Emerging Economy ◽  
Future Research ◽  
Outward Foreign Direct Investment ◽  
Outward Fdi

AbstractResearch examining emerging economy inward and outward foreign direct investment (FDI) flows is on a significant upward trajectory. In this bibliometric analysis covering 806 articles published between 1994 and 2019, we map key aspects of its contours. Our analysis proceeds in two sequential phases involving a performance analysis, followed by a thematic analysis. Our performance analysis unveils fundamental elements of the structure of the knowledge base. Our subsequent thematic analysis identifies three focal topics arising from identifiable shared qualities characterizing this literature. Firstly, we distinguish scholarship focused on inward FDI into emerging economies formed by two particular classes, namely ‘innovative FDI’ and ‘capital flows’. Our second theme covers outward FDI from these emerging economies and also comprises two specific classes referring to the ‘institutional environment’ and the ‘theoretical framework deployed’. Our final theme relates to an integrated body of knowledge explicating aspects of the location choice decision. Building on this analysis, we isolate a number of opportunities for future research.

scholarly journals Just Look behind the Data! Czech and Hungarian Outward Foreign Direct Investment and Multinationals

2019 ◽  
Vol 69 (S2) ◽  
pp. 73-105 ◽  
Author(s):  
Magdolna Sass ◽  
Jana Vlčková
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Transition Process ◽  
Balance Of Payments ◽  
Foreign Direct Investments ◽  
Outward Foreign Direct Investment ◽  
Outward Fdi ◽  
Foreign Investors ◽  
The Czech Republic ◽  
Main Factors

There has been an increase in outward foreign direct investment (FDI) and in the number of locally-owned or controlled multinationals in the Czech Republic and Hungary. However, data problems hinder to determine accurately the underlying trends and the main factors behind the changes. Data on outward FDI contain investment realised by all locally operational firms, regardless of their ownership. We rely on newly available balance of payments manual 6 (BPM) data and on company case studies. We show that outward investment by Czech firms must be much higher than what balance of payments data show. Hungary's case is the opposite. The leading Czech and Hungarian foreign investor firms can be categorised as “virtual indirect” foreign investors: they are in majority foreign ownership, but under domestic control. The reason for this special type of firms dominating in outward foreign direct investments can be found in the privatisation technique applied in these countries during the transition process.

Outward Turkish foreign direct investment continues

2019 ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Market Economy ◽  
Direct Investment ◽  
Emerging Market ◽  
Outward Fdi ◽  
Content Type ◽  
Know How ◽  
The Past ◽  
Set Up ◽  
International Systems

Significance As an open emerging-market economy which usually runs large external deficits, Turkey has long sought to attract foreign direct investment (FDI), with varying degrees of success. At the same time, Turkish companies have been spending significant sums to acquire or set up businesses in other countries over the past 10-15 years. Impacts Turkey’s role as a source of FDI will strengthen Ankara’s influence in the countries that benefit or stand to benefit. The presence of Turkish investors in EU countries, Russia and the Middle East may help to defuse international tensions. Outward FDI may improve the competitiveness of Turkish companies through gains in know-how and integration into international systems.

Political risk distribution of Chinese outward foreign direct investment

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qiuyu GaoYan
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Risk Index ◽  
Political Risk ◽  
Principal Component ◽  
Government Support ◽  
Outward Foreign Direct Investment ◽  
Content Type ◽  
Risk Distribution

PurposeThe purpose of this paper is to contribute to a better understanding on relations between Chinese Outward Foreign Direct Investment (OFDI) and host country political risk. To contribute to a better understanding of whether traditional wisdom on foreign direct investment (FDI) is sufficient to explain the internationalization of Chinese multinational enterprises, the author collected 15 proxy variables from the PRS Group and Heritage Foundation and applied principal component analysis (PCA) to construct a new political risk index (PRI) that measures multiple facets of political risk for 139 countries.Design/methodology/approachUsing this new PRI as a criterion, the author investigated changes in the political risk distribution (PRD) of Chinese outward FDI (OFDI) regarding investment destinations, large projects, annual investment outflows and sectorial distributions from 2006–2017.FindingsThe author found that the vast majority of Chinese OFDI during this period is concentrated in moderate- and low-risk countries, even at the sectorial level. This paper also shows that the continuing reform of Chinese OFDI policy and strong government support have led to an unprecedented increase in Chinese OFDI, while the PRD of Chinese OFDI has maintained a gradual decline over the past decade.Originality/valueThis research provides a new measurement that covers multiple facets of political risk.

scholarly journals Export Structure Effect of Outward FDI of Sichuan Province of China

2018 ◽  
Vol 10 (9) ◽  
pp. 181
Author(s):  
Xiaohui Wang
Keyword(s):  
Foreign Direct Investment ◽  
Panel Data ◽  
Direct Investment ◽  
Sichuan Province ◽  
Structure Effect ◽  
Sufficient Evidence ◽  
Outward Foreign Direct Investment ◽  
Outward Fdi ◽  
Effect Analysis ◽  
Export Structure

This paper made an export structure effect analysis of outward foreign direct investment of Sichuan Province of China using the method of OLS and GMM with the provincial panel data of ordinary export from 2004 to 2016. The empirical results indicate that Outward Foreign Direct Investment can affect ordinary export positively both in China and in Sichuan Province. With each 1% increase of outward foreign direct investment, China’s ordinary exports increased by 0.344%, while Sichuan’s ordinary exports increased by 0.483%. Furthermore, this paper indicates that outward foreign direct investment leads to the upgrading of export structure in China. But, this paper can’t find sufficient evidence that Sichuan’s Outward Foreign Direct Investment can promote export structure.

Technological innovation policy and Chinese heterogeneity enterprises' outward foreign direct investment

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jinjing Zhao ◽  
Jongchul Lee
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Innovation Policy ◽  
Local Economy ◽  
Outward Foreign Direct Investment ◽  
Central State ◽  
Chinese Enterprises ◽  
Content Type ◽  
Privately Owned

PurposeThe study aims to analyze the role of the Made in China 2025 (MIC2025) initiative in China's Outward Foreign Direct Investment (OFDI) and the factors affecting the success or failure of Chinese enterprises' OFDI from the perspectives of the heterogeneity of home country enterprises.Design/methodology/approachBased on data on China's OFDI obtained from the China Global Investment Tracker (CGIT), the study uses the difference-in-differences model to analyze 2,670 completed OFDI deals and 211 failed OFDI deals by Chinese enterprises, from 2009 to 2018.FindingsThe study found that the effect of MIC2025 on Chinese enterprises' OFDI varies according to the ownership structure of the home country's enterprises. For successful OFDI, MIC2025 significantly impacted central state-owned enterprises (CSOEs), while it did not significantly influence local SOEs and privately owned enterprises. For failed OFDI, the MIC2025 plan only increased the failure of CSOEs' OFDI for the technology-seeking motivation in high-income host countries. Further, the investment options of local SOEs differ from those of CSOEs. Considering their aim to drive the local economy and seek profits, they are more similar to those of privately owned enterprises.Originality/valueThis study used a new database (i.e. the CGIT) to analyze Chinese enterprises' OFDI. It discussed the role of MIC2025 for different enterprises from the perspectives of successful and failed OFDI. It thus provided a new basis for analyzing policy affecting the OFDI of Chinese enterprises.

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