Why Did They Get in Trouble? The Influence of Firm Characteristics and Institutional Distance in the Case of Chinese Outward Foreign Direct Investment
Posted: 24 Jun 2020
Date Written: January 29, 2020
Existing research on Chinese multinational companies has overlooked the fact that China’s outward foreign direct investment is facing a high failure rate even in their initial attempt to enter a foreign market. Grounded on institutional theory, this study provides a more holistic view of the globalization dynamic using a unique dataset that contains both successful and failed Chinese outward foreign direct investment attempts during the year 2017 to 2018. Firm characteristics have an important influence on the probability of successful foreign market entry attempt, but the effect is conditioned on institutional discrepancies between China and host countries.
Keywords: Chinese OFDI, Market Entry Attempt, Firm Characteristics, Institutional Distance
JEL Classification: O24, G23, F23
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