Determinants of outward foreign direct investment from BRIC countries: an explorative study

Abstract

Purpose -Outward foreign direct investment (FDI) of firms from Brazil, Russia, India and China has increased significantly during the last few years. Despite this trend, comprehensive research on the specific determinants and antecedents of outward FDI from BRIC countries is still underrepresented. The purpose of this paper is to give a more comprehensive understanding of outward FDI from BRIC countries. Design/methodology/approach -Based on an exploratory approach, case studies of eight companies were conducted. Both a within-case and a cross-case approach were conducted. Findings -The findings reveal the relevance of determinants on the country, industry and firm level. Gaining access to new markets is of utmost importance for all firms. Additionally, most companies seek to obtain access to technological resources and management know-how, therefore emphasizing the availability of these resources in the target countries. While the internationalization of Brazilian and Indian companies is primarily driven by economic motives, many Chinese and Russian firms also receive substantial political support from their governments to invest abroad, especially in strategically important industries. On the firm-level, the strength of firm-specific resources is highlighted. BRIC country firms possess specific strengths that help them to enter both developing as well as developed countries and to pursue their internationalization strategy. Originality/value -The aim of this study is to systematically analyze the determinants of FDI of firms from BRIC countries. While previous studies in this context are based on internationalization theories which were at least implicitly focused on FDI of firms from developed markets, the authors use a more emic approach and look for specific determinants of outward FDI of firms originating in BRIC countries.

Determinants of Greenfield emerging market outward FDI into the UK

“…More recent developments in the field of EM OFDI are very 'different' compared to the traditional OFDI flows from developed markets. Focusing on the 'newness' or 'difference', there have been discussions on (1) theoretical framework within which this new phenomenon can be explained in terms of whether new theories are needed or new applications of conventional theories are justified (e.g., Mathews, 2006;Luo and Tung, 2007;Peng et al, 2008; Ramamurti and Avenue, 2008;Tolentino, 2012;He and Fallon, 2013), (2) the characteristics of EM MNEs which carry out OFDI in terms of their motivations, strategies, type of FDI (e.g., Makino et al, 2002;Mathews, 2006;Luo and Tung, 2007;Dunning et al, 2008;Gammeltoft, 2008;Ramamurti and Avenue, 2008 ;Yamakawa et al, 2008;Alon, 2010;Holtbrugge and Kreppel, 2012;Contractor, 2013;Dikova et al, 2016) and, related to (2), (3) both the endogenous and exogenous background which influence EM MNEs' behaviour regarding OFDI decisions (Mathews, 2006;Luo and Tung, 2007;Buckley et al, 2008;Dunning et al, 2008;Yamakawa et al, 2008;Ning and Sutherland, 2012;Tolentino, 2012;Wang et al, 2012;Dikova et al, 2016;Padilla-Perez and Nogueira, 2016). More recently, some studies have started to consider the 'post-investment' stage of EM OFDI, such as EM MNEs' performance in the host (Gubbi et al, 2010;Buckley, et al, 2014;Sanfilippo, 2015;Yuan and Pangarkar, 2015).…”

“…This motivation differs from the market expansion motivation of traditional firms, as this motivation reflects both 'push' and 'pull' factors from EM home and the DM host. Facing market constraints at home such as under-developed market or intensified competition caused by globalisation pressure, EM MNEs see the highly integrated world market, which is often growing even more rapidly than their domestic economies, as a new opportunity to expand their business as an alternative to their home market (Holtbrugge and Kreppel, 2012;Contractor, 2013). Particularly, the 'more developed market' or the 'more abundant market opportunities' in DM hosts can attract EM OFDIs as pull factors.…”

“…Including only 'Greenfield FDIs' in the model was partly due to data availability and does limit the data set, but this can bring some advantages, particularly regarding another major issue of the difference between projects in their sizes. EM OFDI carried out by State-Owned Enterprises (SOEs) and (Lunding, 2006;Dunning et al, 2008;Rogen and Hanemann, 2009;Alon, 2010;Holtbrugge and Kreppel, 2012). Thus, excluding these cases alleviates concern regarding large differences in investment size between projects.…”

Markets, Globalization, Development: Charting the Intersections of Three Multipolar Concepts

“…The fairly simplistic stage-by-stage laddered views of development (Rostow 1960(Rostow /1990Germani 1969) have been challenged, subverted, diverted, or inverted by a variety of "development models" ranging from 'revolutions' (Conway and Barbier 2013) to "tiger" economies (Lall 2000) to BRIC-style emerging economies (Holtbrügge and Kreppel 2012) to statist-capitalist formations (Boisot and Child 1996) to theocracyled patterns (Gheissari 2009), and even fallen-from-grace examples (Della Paolera and Taylor 2003). Indeed, serious development scholars have long recognized that straitjacketing of complex processes such as modernization and development into simple and rather deterministic frames does not usually work (e.g., Bernstein 1971).…”

Decoupling e integração entre os mercados acionários dos BRICS

“…China 8,4 8,3 9,1 10 10,1 11,3 12,7 14,2 9,6 9,2 10,4 9,3 7,8 Índia 5,7 3,9 4,6 6,9 7,7 9 9,4 10,1 6,2 5 11,2 7,7 4 Rússia 10 5,1 4,7 7,2 7,1 6,4 8,1 8, 5 5,2 -7,8 4,5 4,3 3,4 África do Sul 4,1 2,7 3,7 2,9 4, 5 5,3 5,6 5,5 3,6 -1,5 3 (HOLTBRÜGGE, KREPPEL, 2012;SANTOS, 2010;NAYYAR, 2008;WALZ, 2007).…”