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The paper investigates the relationship between China’s net direct foreign investment position and economic development and the investment development path (IDP) theory introduced by Dunning (1981). Using annual data for the period 1979 to 2005 and a fourth order single variable polynomial function we demonstrate that form of the IDP for China and conclude that China entered stage 3 of the path postulated by the IDP theory. By analyzing key factors which have impacted FDI inflows and outflows we find that certain idiosyncratic characteristics of Chinese companies and institutional factors may limit the significant increase in the multinationalization of Chinese firms which would be required for the country to move along the IDP.

The purpose of this paper is to focus, at the country‐specific level, on India's recent outward foreign direct investment (OFDI) surge, and more broadly test the investment development path (IDP) hypothesis for India.

A combination of descriptive and empirical analysis has been used to ascertain the relevance of the IDP theory for India. The theoretical background of this paper is the IDP hypothesis, which states that the net outward investment position (NOIP) of a country depends on its level of development. The hypothesis is tested with a time series data set from 1991 to 2006.

This paper highlights that while India's sharp rise in investments since 1991 has followed the gross domestic product driven development, its NOIP fails to exactly match the stylized IDP model.

This paper undertakes a macro level analysis and has not tested the hypothesis at the sectoral or bilateral levels.

The paper identifies some peculiar features of Indian OFDI that cannot be explained by the IDP model per se. Hence modifications are required for a fuller understanding of India's investment position.

This paper addresses an under researched topic of Indian OFDI.

While conventional views of foreign investment activity primarily relate to efficiency-seeking investments, the authors argue that most other outward foreign direct investments (OFDIs) likely have positive effects on income development in the home region. Data on the US urban system not only illustrates this but also shows that this impact is not equal in all city-regions. The purpose of this paper is to develop an explanation as to why high- and low-income cities are associated with self-reinforcing cycles of OFDI activity that have different home-region impacts.

Conventional views assume that inward foreign direct investments (IFDIs) have a positive impact on target regions, while OFDIs are often treated as the flip side of this story, being seen as having negative effects by shifting jobs and income abroad. This paper counters this logic by developing a conceptual argument that systematically distinguishes different types of OFDIs and relates them to economic development effects in the home (investing) region.

Using a co-evolutionary conceptualization, this paper suggests that many high-income cities are characterized by a virtuous cycle of development where high, successful OFDI activity generates both positive income effects as well as incentives to engage in further OFDIs in the future, thus leading to additional income increases. In contrast, it is suggested that low-income cities are characterized by what we refer to as vicious cycles of development with low OFDI activity, few development impulses and a lack of incentives and capabilities for future investments.

This paper develops a counter-perspective to conventional views of OFDI activity, arguing that these investments have a positive impact on regional income levels. The authors develop a spatially sensitive explanation which acknowledges that OFDIs do not trigger a linear process but are associated with diverging inter-urban development paths and may contribute to higher levels of intra-urban inequality. From these findings, the authors derive conclusions for future research and public policy.

The expansion of South‐North and South‐South foreign direct investment (FDI) reflects the rise of cross‐border capital flows, a distinguishing feature of the contemporary global economy, together with the increasing size and complexity of emerging market multinational corporations. Against this background, in emerging economies, governments have become increasingly aware of the role outward FDI (OFDI) can play as an instrument to deepen the integration into the world economy. The purpose of this paper is to analyze recent trends in OFDI from Brazil and China.

Using annual data for the period 1980‐2006 for both countries, the authors test the investment development path hypothesis, according to which the net outward investment position of a country depends on its level of development.

Results show that both China and Brazil are moving towards the third stage of the path, where domestic firms have acquired ownership and other advantages to go abroad and become leading outward investors.

The role of governments, institutions and the characteristics of domestic firms in both countries are considered to be crucial factors in determining the movement along the path.

The investment development path of emerging markets’ MNEs is significantly different from the developed (TRIAD) world’s MNEs; BRIC MNEs seem to have taken a different trajectory on account of various political and economic reasons, ranging from the ‘forms of entry’ to ‘country-specific advantages’ (Tulder, R. V. (2010). Toward a renewed stages theory for BRIC multinational enterprises? A home country bargaining approach. In K. P. Sauvant, G. McAllister, & W. A. Maschek (Eds.), Foreign direct investments from emerging markets: The challenges ahead (pp. 61–74). New York, NY: Palgrave Macmillan). Yet, some believe that in the long run the internationalization strategy of the developed world MNEs and BRIC MNEs will converge. Internationalization strategies as measured by OFDI depend on various macroeconomic determinants such as income, interest rate, openness of the economy, etc. The chapter intend to highlight, the significant difference between these two groups of countries on account of diverse political reforms towards internalization of firms, yet see if these different countries might converge.

Regression analysis examines the significance of the role of home government by testing the effect of governance indicators; that is voice and accountability, on OFDI. It further, tests for convergence of internationalization strategies of the two historically divergent groups, also, it tests convergence amongst the BRIC nations. Along with forecasting, time series analysis is also employed to examine convergence using univariate sigma convergence techniques.

Impact of voice and accountability is significant but it hinders OFDI for BRIC nations, while it promotes OFDI for TRIAD & ALL. Moreover, the analysis found the existence of convergence, that is BRIC will catch up with TRIAD, but though convergence exists amongst BRIC if we take a long span of time (45 years), it is absent in short span of time (19 years), as lately BRIC have shown divergent tendency.

Small sample size in multivariate regression analysis. Also, the governance indicator, that is voice and accountability, is perception based, and missing gaps in data for governance indicator is filled using interpolation.

Empirically testing the convergence of BRIC nations with the developed world. A univariate time series analysis is undertaken to understand each country’s heterogeneous FDI outflows and to address the research gap in existing forecasting literature. In addition, the comparison specifically between the Emerging Market Economies, that is the BRIC nations and the developed world gives some useful insights. This chapter ascertains the impact of governance indicator on OFDI; empirical literature shows such analysis for IFDI & FDI, but OFDI is rarely been dealt with.

Aims to analyze the process of internationalization of multinational corporations from emerging economies, and more broadly test the investment development path (IDP) hypothesis for Egypt.

A combination of data analysis and company case studies to assess to what extent and how Egyptian companies are internationalizing. The theoretical background is the IDP hypothesis, according to which the net outward investment position of a country depends on its level of development.

The paper highlights how poor investment climate and broader geopolitical motives receive limited foreign direct investment (FDI) inflows, while outward FDI limited in size and scope. Despite this climate, the two multinational corporations have successfully expanded abroad, following different strategies.

Data limitations and the limited size of outward FDI prevent a statistical testing of the IDP hypothesis, for example, by regressing the net FDI position on GDP, utilizing a quadratic specification to allow for the non‐linearity in the relationship.

The paper concludes by pointing to the importance of promoting corporate internationalization throughout an active policy to make the business environment more conducive to risk‐taking, instead of rent‐seeking, behaviours.

This paper covers Egypt, an under‐researched country in an under‐researched area (North Africa).

To analyze the industrial development of South, East, and Southeast Asian nations in terms of investment and trade and how the institutional environment – in particular, the government policy with regard to outward foreign direct investment (OFDI) – has played a role in this respect.

The chapter puts OFDI policy and industrial upgrading in newly industrialized, emerging, and developing Asian economies (NIEDAEs) in historical perspective to attempt to draw inference from their past behavior.

The chapter provides information about each NIEDAE’s experience with OFDI policy through a comparative analysis of OFDI promotional policy.

A useful source of information about each NIEDAE’s OFDI policy approach, the chapter attempts to draw recommendations for OFDI policy.

This chapter fulfills an information need and offers practical help to government policy makers.

There is limited empirical research on the internationalization processes, strategies and operations of Asian multinational enterprises (MNEs) from countries at different levels of development. This paper examines and analyzes the internationalization strategies and characteristics of Asian MNEs within the investment development path (IDP) perspective.

Primary data are drawn from matched case studies of emerging MNEs from Taiwan (a newly industrializing country) and Malaysia (a fast developing country) in the textile and electronics industries.

The internationalization strategies of our Taiwanese and Malaysian case firms were founded on cost‐based competencies and other location‐based advantages, brought together by an extensive web of ethnic networks. Differences between our Taiwanese and Malaysian case firms were found and discussed. In general, the Taiwanese firms were more internationalized (at stage 3 of IDP) than the Malaysian firms (stage 2). They had more developed and elaborate production networks and greater own design manufacturing/own brand manufacturing participation than the Malaysian firms.

The research did not capture the operational strategies at the level of the subsidiary or JV. The findings were exploratory and formed the basis for research propositions presented. As indicated there existed a wide empirical research gap on Asian as well as Taiwanese and Malaysian MNEs. These need to be filled to provide further evidence and answers to the issues raised in the paper. Other potential areas of research could include longitudinal studies of Asian MNEs to examine whether they will resemble Western MNEs as they evolve, the impact of ethnic networks on the performance of Asian MNEs of both Chinese and non‐Chinese origins, and the role of the state in internationalization strategies.

Few studies have been done on emerging market multinationals and their internationalisation strategies.

Internationalization is of high relevance and has been discussed intensively. However, different internationalization paths have been proposed by theoretical models and have been observed in reality. In this study, we examine the internationalization path of 52 German firms over a period of ten years using comprehensive and rich data on all new ventures established by these companies within this period. We find four distinct patterns of internationalization and propose a stage model of internationalization based on these findings. Our results show different challenges for managers depending on the stage of internationalization and render interesting starting points for further research.

This study aims to examine two innovation zones in China, including the Suzhou Industrial Park and Tianjin Eco-city, to gain a comprehensive understanding of city locations attributes and its relationship to inward foreign direct investment (FDI) from multinational enterprises (MNEs) in innovation zones embedded in nonhub cities in China.

This research incorporates two site visits and in-depth interviews with 39 personnel working with innovation zones. Thematic analysis is used to analyze interview data and documents.

The results highlight that cities can use innovation zones as a strategy to build high scale knowledge community precincts to connect MNEs and other global actors. As an important institutional feature of city locations, innovation zones increase within-city connectivity and connect cities in global networks resulting in cross-city connectivity to attract FDI from MNEs. From a dynamic knowledge community perspective, this research also compares active and passive approaches toward building knowledge communities and identifies several elements of knowledge communities within innovation zones in China.

The research results could be further explored in other institutional and economic contexts, to understand the interplay of city locations, FDI and innovation zones, and the dynamics of building knowledge communities.

This research has several implications for policymakers and administrators who work with municipal economic development and the development and enhancement of innovation zones. It offers recommendations for MNEs to consider where to make foreign investments and the advantages innovation zones may offer to support FDI.

This research contributes to the literature related to economic development and how nonhub cities can attract FDI and join global networks. It offers empirical insights drawn from two successful innovation zones located in nonhub cities in China.