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This paper aims to propose an integrated framework combining the cost-reduction rationale and the institution-leveraging rationale to explain how institutional distance, both formal and informal, influences emerging multinational enterprises (EMNEs)’ foreign direct investment (FDI) location choice. This paper also explores the moderating role of EMNEs’ FDI experience and strategic intent on value chain positioning as a reflection of firm heterogeneities, on the link between institutional distance and location choice.

This paper tests the hypotheses based on a firm-level longitudinal data set of FDI by Chinese EMNEs. The unique data are manually collected from Chinese companies listed on Shenzhen and Shanghai Stock Exchanges, composed of 250 FDI entries of 122 manufacturing firms from 2006 to 2010. The conditional logit model is used to estimate the proposed main effect and moderating effect.

Cultural distance does not deter Chinese EMNEs’ entrance in general, but firms investing in low value-added manufacturing subsidiaries are more likely to choose culturally similar countries than those investing in high value-added subsidiaries such as in upstream R&D and downstream marketing. Formal institutional distance with positive direction promotes Chinese EMNEs’ entrance, and this effect is enhanced when firms have less FDI experience and have the strategic intent to invest in high value-added subsidiaries.

This paper contributes to the current literature by identifying a holistic view of the institutional influences on FDI location choice of EMNEs and revealing how firm-level heterogeneities, particularly FDI experience and strategic intent of subsidiary value chain positioning, shape the boundary conditions of the institutional effects in different ways.

In recent decades, emerging market multinational enterprises (EMNEs) have predominantly adopted a big step internationalization strategy to expand their business overseas. This study aims to examine the effect of big step internationalization on the speed of subsequent foreign direct investment (FDI) expansion for EMNEs. The authors also investigate the potential boundary conditions.

The authors use the random effects generalized least squares (GLS) regression following a hierarchical approach to analyze the panel data set conducted by a sample of publicly listed Chinese firms from 2001 to 2012.

The findings indicate that implementing big step internationalization in the initial stages accelerates the speed of subsequent FDI expansion. Notably, the authors find that this effect is more pronounced for firms that opt for acquisitions as the entry mode in their first big step internationalization and possess a board of directors with strong political connections to their home country’s government. In contrast, the board of director’s international experience negatively moderates this effect.

This study provides insights into our scholarly and practical understanding of EMNEs’ big step internationalization and subsequent FDI expansion speed, which offers important implications for firms’ decision-makers and policymakers.

This study extends the internationalization theory, broadens the international business literature on the consequences of big step internationalization and deepens the theoretical and practical understanding of foreign expansion strategies in EMNEs.

Since joint venture experience obtained from inward FDI may create a positive or negative impact on ownership mode choice, it is difficult to predict its direct impact. The purpose of this paper is to combine the organizational learning and agency perspectives to find whether CEO power can moderate the effect of inward joint venture experience.

Using a sample of 337 foreign entries conducted by 77 Chinese firms during 1998-2008, this study has tested some interaction effects of inward joint venture experience and CEO power measures.

The author finds that inward joint venture experience interacts with CEO ownership and CEO duality, respectively, to have a negative impact on the selection of high-equity mode.

This study contributes to entry mode literature by finding that inward (but not merely outward) FDI experience can influence entry mode choices and by combining agency theory and the organizational learning perspective to solve the theoretical conflicts created by the two opposite effects of a FDI experience.

Nowadays, China is one of the most important destinations for international expansion of firms from all over the world. Based on the traditional theory on foreign direct investment and the resource‐based view of the firm, this paper analyzes the influence of various tangible and intangible firm‐specific factors on the choice amongst three different modes of entry into China: representative office, joint venture and wholly‐owned subsidiary. The results obtained suggest that the size of the investing firm, its performance as well as its experience regarding the country have a positive influence on the choice of types of foreign direct investment that involve a high level of resources commitment. In addition, the specific aim of the project affects these relationships.

The purpose of this paper is to investigate the macroeconomic determinants of foreign direct investment (FDI) for the top five South Asian economies, namely, Bangladesh, India, Pakistan, Sri Lanka, and Nepal, and to examine whether these factors are the same for each.

This study employs fully modified ordinary least squares and two-stage least squares estimation methods.

This study shows that South Asian economies have a number of FDI determinants in common. For example, market size and human capital are the two most common factors attracting FDI in each country (except for Nepal, which revealed a negative correlation between FDI and market size). Other factors, such as infrastructure, domestic investment, lending rates, exchange rates, inflation, financial stability/crisis, and stock turnover entered into regression with both positive and negative signs, thereby indicating that the underlying theories on FDI do not provide a clear prediction of the direction of the effect of a particular variable on FDI.

This paper studied the effects of demand-side factors on FDI. A comparative study of the supply-side factors may add further knowledge.

This paper provides evidence to show that the determinants of FDI are indeed country-specific. Thus, to design a suitable FDI policy, it would not be wise to solely rely on other economies’ FDI experiences.

This paper provides updated evidence on factors that are essential to promoting or deterring FDI in South Asian economies.

The purpose of this study is to explore the effect of economic complexity on services export diversification. This study has been built on two arguments. The first one draws from Eichengreen and Gupta (2013b) and states that countries that export complex products would have a high penetration in the international goods market and establish a network that could be exploited to expand their range of services export items. Second, by inducing higher inflows of foreign direct investment (FDI), greater economic complexity could contribute to fostering services export diversification.

The empirical analysis uses a panel data set of 109 countries (both developed and developing countries) over the period of 1985–2014, and in particular, non-overlapping sub-periods of five-year average data. Building on the two-step system Generalized Method of Moments, the empirical analysis has provided support for the above-mentioned two theoretical hypotheses.

The findings indicate that greater economic complexity has been associated with a higher level of services export diversification, and the magnitude of this positive effect is higher for high-income countries than for developing countries. Furthermore, the share of FDI inflows (in percentage of gross domestic product) matters for the effect of economic complexity on services export diversification. Specially, economic complexity exerts a higher positive effect on services export diversification, as the share of net FDI inflows in gross domestic product increases.

From a policy perspective, the analysis complements previous works on the effects of economic complexity (e.g. on economic growth, income inequality, poverty, etc.), by showing that economic complexity also matters for fostering the diversification of countries' services export items. Enhancing economic complexity should be at the heart of policymakers' agenda, both at the national and international levels, given its strong positive effect on macroeconomic aggregates, including on services export diversification, the latter being also an important engine for economic growth (Anand et al., 2012; Gnangnon, 2021a; Mishra et al., 2011; Stojkoski et al., 2016).

This study opens an avenue for future research on whether services export diversification influences economic complexity. One avenue for future research could also be to explore the effect of comparative advantage on goods and services (using the Balassa's revealed comparative advantage index) on services export diversification. Future works could also examine how economic complexity affects different categories of services sectors, including traditional services and modern services.

To the best of the author’s knowledge, this study is the first to address this topic in the literature.

The purpose of this paper is to trace the effects of both foreign direct investment (FDI) and external debt on economic growth and employment in Egypt over the 1985–2014 period.

The empirical analysis includes three stages: an aggregate time series analysis, a panel model that includes six economic sectors and a set of single-sector models. The “autoregressive distributed lag” approach is utilized either in the time series or in the panel models.

The empirical results of this research reveal that foreign investment exerts a weak positive effect on economic growth and employment in Egypt. External debt exerts an insignificant effect on economic growth and employment in the aggregate model. The sectoral analysis reveals that the effect varies greatly between sectors; the effect of FDI on output is positive in the financial, tourism and other service sectors, while it is insignificant in the agricultural, construction and manufacturing sectors.

It is important not to depend on external debt as an easy way to obtain capital. Greater efforts should be exerted to increase the absorptive capacity of the Egyptian economy so as to benefit from the positive spillover effect of foreign investment as much as possible.

With respect to Egypt, very limited studies have focussed on the role of external debt on growth and that of FDI and external debt on the employment level. There is no general agreement concerning the effect of FDI on economic growth. Therefore, this research explores the effect of FDI and external debt on the Egyptian economy utilizing both aggregate and sectoral data.

This study, empirically investigates how the ownership‐specific variables, location‐specific variables and strategic motives have influenced the ownership structure choices of Finnish manufacturing firms in ten South and south‐east Asian countries from 1980 to 2000. Very few studies in FDIs have been undertaken so far to empirically analyze the ownership‐specific and location‐specific variables together with the strategic motives in order to understand the ownership structure choices of the investing firms. To the best of our knowledge, this is the first study trying to analyze how the ownership‐specific variables, location‐specific variables, and strategic motives have influenced the ownership structure choices of Finnish manufacturing FDIs in Asian countries. The research results indicate that large international experience, low cultural distance, large market size, and high levels of economic welfare in the target country increases the probability of choosing wholly owned subsidiary (WOS) in order to undertake market‐seeking and efficiency‐seeking FDIs. Similarly, it has also been found that low levels of risks in the target country increases the probability to choose WOS in order to undertake risk‐reduction seeking FDIs.

The purpose of this paper is to provide a critical overview of the recent phenomenon of outward foreign direct investment (OFDI) from China, from a more macro and historical perspective.

The paper critically reviews the extant literature and re-assesses available data on OFDI from China.

It is argued that despite the explosion of academic interest the phenomenon was neither unpredicted nor sudden.

The paper also argues that OFDI from China is not yet so important and neither presents insurmountable challenges to the established literature on FDI.

The industrialisation of Hong Kong evolved in the late 1940s with the establishment of the textile and clothing industry. Following the practice of the textile pioneers, Hong Kong clothing entrepreneurs initiated foreign direct investment (FDI) as early as the late 1950s in order to evade the quantitative limitations on clothing exports into developed country markets. In‐depth literature search, survey and interviews have identified that the Hong Kong clothing industry is now in its fourth stage of migratory expansion. The search for export quotas or privileged access to developed countries has delineated the locations for offshore clothing production of Hong Kong firms.