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This study examines and extends the resource dependence logic of diversification for a better understanding of outward foreign direct investment (OFDI) activities by emerging market firms. We contend that the diversification logic is bounded by state ownership, an important but less considered component of interdependence. Our empirical results, based on panel data analysis of Chinese listed firms, suggest that the level of interdependence between Chinese and foreign firms in China in multiple forms, including symbiotic, competitive, and partner interdependencies, is positively associated with the level of the Chinese firms' OFDI activities. However, Chinese firms with higher levels of state ownership are less susceptible to the pressures imposed by foreign firms to invest abroad.

International trade agreements lead to more foreign direct investment (FDI) in developing countries. This article examines the causal mechanisms underpinning this trade-investment linkage by asking whether institutional features of preferential trade agreements (PTAs), which allow governments to make more credible commitments to protect foreign investments, indeed result in greater FDI. The authors explore three institutional differences. First, they examine whether PTAs that have entered into force lead to greater FDI than PTAs that have merely been negotiated and signed, since only the former constitute a binding commitment under international law. Second, they ask whether trade agreements that have investment clauses lead to greater FDI. Third, they consider whether PTAs with dispute-settlement mechanisms lead to greater FDI. Analyses of FDI flows into 122 developing countries from 1971 to 2007 show that trade agreements that include stronger mechanisms for credible commitment induce more FDI. Institutional diversity in international agreements matters.

Based on the panel data of 30 provinces (except for Tibet, Hong Kong, Macao, and Taiwan) in China from 2005 to 2016, a nonlinear threshold regression model and a carbon emission expansion models were constructed to empirically analyze the threshold effect of inward foreign direct investment (IFDI) and outward foreign direct investment (OFDI) on carbon dioxide emission intensity in China. The results show that (1) China’s OFDI has increased carbon dioxide emission intensity while the IFDI has a significant inhibitory effect on carbon dioxide emission intensity. (2) The impact of the OFDI on carbon dioxide emission intensity gets influenced by the threshold effect of population size, economic development level, technology level, and environmental regulation. (3) The impact of the IFDI on carbon dioxide emission intensity also has threshold characteristics affected by population size, economic development level, and technological level. Hence, China should introduce more IFDI, optimize the structure of the OFDI, and exert its environmental improvement effect to satisfy the carbon emission reduction goal earlier.

In this perspective paper we argue that outward foreign direct investment (OFDI) undertaken as escape response to perceived misalignment between firm needs and home country institutional conditions represents an important but under-explored phenomenon in the international business (IB) literature. We propose that, in advanced industrialized nations, the extent of OFDI as escape is likely to rise with the extent of societal coordination in the political economy. Societal coordination is associated with relatively slower rates of institutional adjustment and thus with relatively greater prevalence of misalignments that may drive OFDI. We illustrate the face validity of our argument and lay out the implications for future research in IB.

China’s foreign direct investment is an important driving force for economic growth, which also aggravates carbon emissions. Based on China’s provincial panel data from 2003 to 2018, this paper uses the panel-fixed effect model and panel threshold model to explore the impacts of two-way foreign direct investment on carbon emissions and analyze the threshold effects of different environmental regulations. The empirical results show that inward foreign direct investment (IFDI) has a significant inhibitory effect on carbon emissions, while outward foreign direct investment (OFDI) leads to the aggravation of carbon emissions. Considering regional heterogeneity, environmental regulation in high-carbon areas mainly affects local OFDI, and environmental regulation in low-carbon areas mainly inhibits carbon emissions by affecting IFDI. In addition, high-carbon regions can achieve the inhibition of OFDI on carbon emissions by strengthening command-and-control regulation and reducing the promotion of OFDI on carbon emissions by strengthening market incentive regulation and voluntary regulation. Meanwhile, excessive command-and-control regulation and market incentive regulation in low-carbon areas bring unexpected regulatory effects, but the inhibitory effect of IFDI on carbon emissions can be increased by strengthening voluntary regulation.

This study addresses an apparent impasse in the research on organizations’ responses to cultural distance. We posit that cross-country differences in egalitarianism—a cultural orientation manifested in intolerance for abuses of market and political power and support for protection of less powerful actors—affect multinational firms’ choices of destinations for foreign direct investment (FDI). Using historically motivated instrumental variables, we observe that egalitarianism distance has a negative causal impact on FDI flows. This effect is robust to a broad set of competing accounts, including the effects of other cultural dimensions, various features of the prevailing legal and regulatory regimes, other features of the institutional environment, economic development, and time-invariant unobserved characteristics of origin and host countries. We further show that egalitarianism correlates in a conceptually compatible way with an array of organizational practices pertinent to firms’ interactions with nonfinancial stakeholders, such that national differences in these egalitarianism-related features may affect firms’ international expansion decisions.

Emphasizing the importance of informed location choice, prior strategy research has examined how private information about locations affects foreign direct investment. Publicly available media information has received little attention, however, perhaps because its impact on location choice is expected to be trivial. This study examines the relationship between the extent of a location's media coverage and the number of entering foreign firms in Russia, using a novel instrumental variable for media coverage, a major anniversary of a city's establishment date. The results suggest that extensive foreign media coverage of a city increases the number of foreign entrants. This effect is stronger for firms with less private information about Russian cities; i.e., more socially and geographically distant firms and foreign entrepreneurs.

International migration has become one of the most debated topics in many developed and developing countries. Host countries are concerned about the socioeconomic consequences of international migration, while sending countries-from a developing country's perspective-are concerned about the brain drain and loss of their younger population. This paper presents a concise literature review on existing theories of international migration, and long-run effects of international migration on Foreign Direct Investment (FDI). The empirical studies reviewed in this paper indicate a positive and statistically significant relationship between international migration and FDI.

This paper innovatively combines Inward Foreign Direct Investment (IFDI) and Outward Foreign Direct Investment (OFDI) as a measure of two-way FDI coordinated development to consider the coupling and coordination level of FDI. Under the analytical framework of Copeland and Taylor (1994), it introduces this new measure to investigate the effects of China’s carbon emissions during 2004–2016, using the spatial econometric model and the differential generalized method of moments. We find that China’s carbon emissions show significant spatial correlation characteristics and interregional diffusion, which indicates that regional coordinated cooperative governance is key to carbon emission mitigation in China, and that China’s two-way FDI coordinated development has presented a significant braking effect on carbon emissions during the research period. Furthermore, we decompose the effects of the two-way FDI on carbon emissions into three parts. This decomposition shows that the scale effect is positive, while both the composition and the technique effects are negative. The technique effect essentially dominates the emission reduction induced by the coordinated development of the two-way FDI.

We examine the extent to which Chinese government support of foreign direct investment (FDI) projects and host country institutional environments interact with prior entry experience by Chinese firms, and how this interrelationship affects FDI undertaken by Chinese firms. We hypothesize that home country government support and well-established host country institutions enhance organizational capabilities to take risks in FDI. As such, they reduce the need to accumulate experiential knowledge and capabilities relating to entering host countries based on prior entry experience in a particular country when undertaking follow-up investment projects. Using a unique, hand-collected panel data set of Chinese publicly listed firms during 2002-2009, we find that home government support and well-developed host country institutions reduce the importance of prior entry experience and significantly increase the likelihood of FDI entry into a host country. Further, from our subsample analyses we identify differences between entering developed and developing host countries in terms of the impact of home country government support and quality of host country institutions. Our findings help explain the puzzle concerning why emerging economy firms have rapidly internationalized in a short period of time and do not follow the pattern predicted by classical IB theories.