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Determinants of Greenfield emerging market outward FDI into the UK

Eun Sun Godwin (Business School, University of Wolverhampton, Wolverhampton, Great Britain and Northern Ireland)
Mark Cook (University of Wolverhampton, Wolverhampton, Great Britain and Northern Ireland)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 16 July 2018




The purpose of this paper is to examine the determinants of Greenfield emerging market (EM) outward foreign direct investment (OFDI) into the UK, a developed market (DM) host. Despite the increasing significance of EM OFDI, this particular theme of EM OFDI to a DM host has received relatively little attention from researchers. This paper seeks to address this shortfall.


Considering the distinctiveness of EM OFDI in its firm-specific characteristics, given circumstances and motivations, this paper applies adapted “Resource-based view (RBV)” framework and institutional theory to build a theoretical framework. A range of hypotheses regarding “strategic-asset seeking”, “market seeking” and “institution seeking” motivations of EM OFDI, which reflect both “pull factors” (advantages in hosts) and “push factors” (disadvantages at home), were then developed. Using panel data for the years 2003–2012, the research questions were analysed using a sample of the then most important EM source countries which had undertaken Greenfield FDI into the UK.


The analysis results supported the hypotheses that strategic-asset seeking and institution seeking motivations were important in determining EM OFDI to the UK, with the coefficients of relevant variables showing statistical significance and expected sign (i.e. positive). However, the hypothesis on market seeking motivation of EM OFDI cannot be supported as the coefficient of the relevant variable, whilst showing the expected sign, had a statistically insignificant coefficient. Amongst the three control variables, the source countries’ exports and imports as a percentage of GDP was statistically significant and had the correct sign whilst, the UK’s share of intra-EU trade, whilst statistically significant, had the opposite sign to that expected. The third control variable, the exchange rate was not statistically significant, though it had the correct sign.


This paper provides an adjusted theoretical framework for the analysis of EM OFDI to DM with a novel application of institutional theory and RBV. It also qualifies and extends existing works on EM OFDI by including a wider range of EM source countries and DM hosts with empirical analysis results as well as theoretical suggestions. In addition, the paper offers up a range of policy implications for DM hosts.



Godwin, E.S. and Cook, M. (2018), "Determinants of Greenfield emerging market outward FDI into the UK", International Journal of Emerging Markets, Vol. 13 No. 3, pp. 460-477.



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