Purpose Institutional factors play an important and complex role in Chinese outward foreign direct investment (OFDI) location choices that do not seem to be influenced by a host country’s high political risks. Moreover, the location choice for OFDI is key to corporate strategic decision-making on internationalization. Therefore, this study aims to examine the direct investments of Chinese multinational enterprises (MNEs) in Laos. Design/methodology/approach Combining the purposive sampling strategy and snowball sampling method, the authors interviewed nine market- and resource-seeking Chinese enterprises in Laos. Drawing from the mainstream eclectic paradigm and the theory of new institutional economics, the authors analyzed two key variables – enterprise investment motivation and enterprise heterogeneity. Findings Chinese MNEs are not insensitive to the regressive institutional quality of host countries; the relationship effect and institutional distance are the location decision pathways along with which institutional factors influence Chinese multinationals’ investments in Laos; political stability is necessary for Chinese-funded enterprises to invest in Laos and the degree of corruption is an overestimated institutional preference factor. Originality/value The relationship effect is introduced into the analysis framework as an intermediate variable that influences the decision of MNEs to invest in countries with underdeveloped institutions. It verifies the significant roles of bilateral political relations and network relations in the OFDI location decisions of state-owned and private enterprises, respectively.
This study examines Taiwanese investment in Mainland China as it is an important part of cross-strait economic cooperation. Using sample data from Taiwanese-listed electronic information enterprises in Mainland China (1990–2016), this study combines ArcGIS spatial visualization and case analysis to investigate their value chain organization models and spatiotemporal evolution regularity. The results show that the value chain of the electronic information industry for Taiwanese investments in Mainland China has three models: vertical integration, modularization in production sharing, and production extension. Vertical integration is the main production organization model of these Taiwanese listed electronic information enterprises, expanding from single production to the entire manufacturing value chain, followed by sales, and finally R&D. This model is still in use in the Western Taiwan Straits Economic Zone, whereas the other four Taiwanese investment agglomerations, namely the Bohai Economic Rim, Yangtze River Delta, Pearl River Delta, and Western Delta Economic Circle, began to expand to both ends of the production link, particularly to the sales link. High-value -added enterprises adopting production sharing models began to show a trend of expansion to inland cities, and enterprises adopting the manufacturing–sales model (a production expansion model) had the widest distribution. Finally, at the city level, the value chain fragmentation structure of Taiwanese and developed countries’ cross-border (multinational) enterprises in Mainland China were consistent, that is, they matched the Chinese city hierarchy; at the regional level, however, the Western Delta Economic Circle pioneered to become a hub for Taiwanese electronic to information enterprises set up their R&D and sales links in Mainland China. Investigating chain-alike spatiotemporal expansion of Taiwanese investment in Mainland China is important for the integration and development of the value chain, production network, and enterprise spatial organization theories.
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