Location choice, ownership structure and multinational performance
ISSN: 1525-383X
Article publication date: 1 October 2018
Issue publication date: 12 October 2018
Abstract
Purpose
This paper aims to link location choice and ownership structure to the debate on the multinationality–performance relationship.
Design/methodology/approach
This paper draws on a panel data set that covers 1,321 emerging economy multinational enterprises (EMNEs) and includes 4,227 observations from 44 emerging economies between 2004 and, 2013.
Findings
The empirical results find that multinationality has a positive effect on EMNEs’ performance, and that this positive effect is larger for their investments in developed countries than in developing countries. The study also finds that this positive effect of foreign operation in developed countries switch to negative at higher levels of multinationality for privately owned EMNEs than for state-owned EMNEs.
Originality/value
This paper provides new empirical evidence to support an institutional perspective of the internationalisation of EMNEs that are investing in developed countries, contributing to the multinationality-performance literature, highlighting the importance of foreign direct investment location decision and ownership structure.
Keywords
Acknowledgements
Editor notes: We were invited by Prof Davide Castellani (davide.castellani@henley.ac.uk) for the submission of revised manuscript (minor revision) to a multinational business rview special issue that is linked to 12th ISGEP 2017 workshop at the University of Reading in the UK.
Notes
For thorough review of different measures, see Hassel et al. (2003).
These 44 emerging economies include Argentina, Bahrain, Brazil, Bulgaria, Chile, China, Colombia, Czech Republic, Egypt, Estonia, Greece, Hong Kong, Hungary, India, Indonesia, Israel, Jordan, Kuwait, Latvia, Lithuania, Malaysia, Mexico, Morocco, Nigeria, Oman, Pakistan, Peru, Philippines, Poland, Qatar, South Korea, Romania, Russia, Saudi Arabia, Singapore, Slovakia, Slovenia, South Africa, Sri Lanka, Thailand, Turkey, Ukraine, UAE and Vietnam. To capture the largest possible country coverage of the emerging economy group, the country grouping is based on the definitions provided by several institutions (IMF, BRICS+NEXT Eleven, FTSE, MSCI, S&P, EM bond index, Dow Jones, Russell and Columbia University EMGP) and previous studies (Bebenroth and Hemmert, 2015).
The 177 host countries include Afghanistan, Albania, Algeria, Angola, Antigua and Barbuda, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Benin, Bermuda, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, British Virgin Islands, Brunei, Bulgaria, Burkina Faso, Burundi, Cambodia, Cameroon, Canada, Cayman Islands, Central African Republic, Chile, China, Colombia, Congo, Congo Democratic, Costa Rica, Cote d’Ivoire, Croatia, Curacao, Cyprus, Czech Republic, Denmark, Djibouti, Dominican Republic, Ecuador, Egypt, El Salvador, Estonia, Ethiopia, Fiji, Finland, France, Gabon, Gambia, Georgia, Germany, Ghana, Gibraltar, Greece, Guatemala, Guinea, Guinea-Bissau, Haiti, Honduras, Hong Kong, Hungary, Iceland, India, Indonesia, Iran, Iraq, Ireland, Israel, Italy, Jamaica, Japan, Jordan, Kazakhstan, Kenya, Kosovo, Kuwait, Kyrgyzstan, Laos, Latvia, Lebanon, Lesotho, Liberia, Libya, Liechtenstein, Lithuania, Luxembourg, Macao, Macedonia, Madagascar, Malawi, Malaysia, Maldives, Mali, Malta, Marshall Islands, Mauritania, Mauritius, Mexico, Moldova Republic, Monaco, Mongolia, Montenegro, Morocco, Mozambique, Myanmar, Namibia, Nepal, Netherlands, New Zealand, Nicaragua, Niger, Nigeria, Norway, Oman, Pakistan, Palestinian Territories, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Portugal, Qatar, Romania, Russia, Rwanda, Samoa, Saudi Arabia, Senegal, Serbia, Seychelles, Sierra Leone, Singapore, Slovakia, Slovenia, Solomon Islands, South Africa, South Korea, Spain, Sri Lanka, Sudan, Suriname, Swaziland, Sweden, Switzerland, Syria, Taiwan, Tajikistan, Tanzania United Republic, Thailand, Togo, Tonga, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, UAE, UK, US, Uganda, Ukraine, Uruguay, Uzbekistan, Vanuatu, Venezuela, Vietnam, Yemen, Zambia and Zimbabwe.
Citation
Gu, J., Yang, Y. and Strange, R. (2018), "Location choice, ownership structure and multinational performance", Multinational Business Review, Vol. 26 No. 3, pp. 250-276. https://doi.org/10.1108/MBR-12-2017-0105
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited