Establishment mode choice by Chinese firms in Latin America: The role of host country‐specific experience and government official visits

Quer, Diego; García, Laura Rienda; Andreu, Rosario

doi:10.1002/tie.22092

Cited by 7 publications

(8 citation statements)

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“…International business scholars have previously utilized such data to examine FDI location choices (e.g.,Albino-Pimentel, Dussauge, & Shaver, 2018;Filippaios, Annan-Diab, Hermidas, & Theodoraki, 2019).Prior research has also shown that various institutional factors in the host country can affect the choice of establishment modes of Chinese MNEs. For example,Quer, Rienda, and Andreu (2020) report that Chinese firms are more likely to enter Latin American markets through acquisitions when they have prior experience operating in the host country. Similarly,Alon, Elia, and Li (2020) suggest that Chinese MNEs are more likely to use M&As when there are more previous investments in the same host markets.…”

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confidence: 99%

Governance, foreign aid, and Chinese foreign direct investment

Fon

Alon

2022

Thunderbird Intl Bus Rev

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This article examines how Chinese foreign aid interacts with the quality of the host country's governance in shaping Chinese state-owned enterprises' (CSOEs') foreign direct investment (FDI) in Africa. By analyzing the firm-level greenfield FDI data of CSOEs between 2003 and 2014 and distinguishing between China's official development assistance and less concessional forms of Chinese foreign aid, we reveal two main findings. First, the quality of the host country's governance negatively affects CSOEs' FDI. Second, other official aid and loans from China negatively moderate the relationship between the quality of the host country's governance and FDI by CSOEs. Specifically, the tendency for CSOEs to invest in locations with weak governance increases when their investments are integrated with less concessional forms of Chinese foreign aid in the form of other official flows and loans. Our results are robust to alternative measures of the governance and different methodological approaches. The article challenges the traditional notion of institutional theory which assumes a positive relationship between governance quality and FDI attraction.

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confidence: 99%

Governance, foreign aid, and Chinese foreign direct investment

Fon

Alon

2022

Thunderbird Intl Bus Rev

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“…This is a dummy variable that takes the value of (1) if the firm acquired a local company and the value of (0) if it made a greenfield investment (Barkema and Vermeulen, 1998; Meyer et al ., 2014; Sun et al ., 2021b). The latter category also includes greenfield joint ventures (Brouthers and Hennart, 2007), as this has been the criterion used in some prior studies on establishment mode choice (Barkema and Vermeulen, 1998; Quer et al ., 2020a, b).…”

Section: Methodsmentioning

confidence: 99%

“…Within this context, diplomatic relationships between countries play a significant role. They symbolize an interaction between the institutions of origin and destination, that acts as a “bridge” between countries and can be a substitute for firm's experience (Duanmu, 2014; Li et al ., 2018; Quer et al ., 2020a; Shapiro et al ., 2018).…”

Section: Theory and Hypothesis Developmentmentioning

confidence: 99%

“…Extant research on the determinants of establishment mode choice by Chinese MNEs mainly focused on institutional factors (Alon et al ., 2020; Anderson and Sutherland, 2015; Liu and Yu, 2018; Lv et al ., 2022; Meyer et al ., 2014; Quer et al ., 2020a, 2020b; Su et al ., 2023; Sun et al ., 2021b; Wu et al ., 2012). Although some studies also considered firm's resources and capabilities, they did not adopt a theoretical perspective to simultaneously analyze, in a single conceptual model, the influence of firm-, industry- and institution-specific factors.…”

Section: Introductionmentioning

confidence: 99%

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The establishment mode of Chinese MNEs abroad and the Belt and Road Initiative: insights from a strategy tripod perspective

Quer

2023

CCSM

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PurposeEmerging-market multinational enterprises (MNEs) have pushed institutional factors to the cutting-edge of international business research. As for Chinese MNEs, the importance of institutions has been strengthened since the Chinese government launched the Belt and Road Initiative (BRI), which seeks to promote a comprehensive platform for cooperation among countries. This study aims to investigate the role played by the BRI as an institutional factor moderating the influence of other institution-, industry- and firm-specific factors on establishment mode choice by Chinese MNEs.Design/methodology/approachDrawing on the strategy tripod, a perspective claiming that a firm's strategies are the result of internal, industrial and institutional conditions, this study develops a number of hypotheses that are tested with data on 1,076 outward foreign direct investments (OFDIs) of Chinese MNEs between 2013 and 2021.FindingsThe results show that the BRI moderates the influence of both the firm's prior international acquisition experience and Chinese government's OFDI restrictions on the establishment by means of an acquisition. They also report that this moderating effect does not apply for acquisition experience in the host country nor institutional distance.Originality/valueThis study contributes to reinforce the importance of institutions as the third leg of a strategy tripod when explaining international behavior of Chinese MNEs. It also suggests that the BRI is a diplomatic tool that may act as a substitute for the firm's resources and may mitigate the negative influence of other external factors.

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“…At first, China's outward FDI stock in transport was selected as the output indicator by country and region. Secondly, based on the existing literature[32][33][34][35][36][37][38][39][40][41][42][43][44][45][46][47], we selected 5 first-level indicators and 14 second-level indicators. e first-level indicators were, respectively, political environment, economic environment, institutional environment, humanistic environment, and social environment.…”

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confidence: 99%

Evaluation of Chinese Transport Infrastructure Investment Performance in Countries along the Belt and Road Initiative

Liu

Jin

et al. 2021

Mathematical Problems in Engineering

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Since the launch of the Belt and Road Initiative (BRI) in 2013, Chinese enterprises have invested heavily in transport infrastructure projects. In order to better promote Chinese overseas transport infrastructure investment (TII) and avoid additional risks, it is necessary to scientifically assess the performance of Chinese TII in countries along the BRI and explore the promotion path of Chinese TII performance. For this reason, we used a superefficient slacks-based measurement (SE-SBM) model to calculate Chinese TII performance based on 5 dimensions, including political environment, economic environment, institutional environment, humanistic environment, and social environment. These 5 dimensions were divided into 14 indicators, and we used quantification with indirect data to quantify all indicators. Then, according to the performance value of selected countries, we classified them into high-, medium-, and low-performance areas. Next, combined with the scale of returns and the shadow price of input indicators, we provided the promotion measures of each performance area. Our analysis generates valuable measures to reduce TII risks and better promote the connectivity of countries along the BRI.

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Establishment mode choice by Chinese firms in Latin America: The role of host country‐specific experience and government official visits

Cited by 7 publications

References 91 publications

Governance, foreign aid, and Chinese foreign direct investment

Governance, foreign aid, and Chinese foreign direct investment

The establishment mode of Chinese MNEs abroad and the Belt and Road Initiative: insights from a strategy tripod perspective

Evaluation of Chinese Transport Infrastructure Investment Performance in Countries along the Belt and Road Initiative

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