Knowledge Seeking and Outward FDI of Emerging Market Firms: The Moderating Effect of Inward FDI

Global Strategy Journal, Forthcoming

40 Pages Posted: 26 Apr 2012 Last revised: 15 Jun 2014

See all articles by Jing Li

Jing Li

Simon Fraser University

Yong Li

University of Nevada Las Vegas

Daniel Shapiro

Independent

Date Written: April 26, 2012

Abstract

This study examines whether a host country’s industry-specific technology advantage increases the propensity of emerging market multinational enterprises (EMNEs) to invest in the host country. The study further explores whether inward FDI in EMNEs’ home markets, by generating knowledge spillovers in the relevant industries, decreases EMNEs’ propensity to invest overseas for knowledge seeking. We test our arguments using a longitudinal dataset of the overseas investment activities of Chinese manufacturing firms. We find strong support for our hypotheses after controlling for other important outward FDI motives. We discuss the implications of our results for research and practice.

Keywords: emerging market MNEs, knowledge seeking, technology advantage, outward FDI, inward FDI, China

Suggested Citation

Li, Jing and Li, Yong and Shapiro, Daniel, Knowledge Seeking and Outward FDI of Emerging Market Firms: The Moderating Effect of Inward FDI (April 26, 2012). Global Strategy Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2046753 or http://dx.doi.org/10.2139/ssrn.2046753

Jing Li

Simon Fraser University ( email )

8888 University Drive
Burnaby, British Colombia V5A 1S6
Canada

Yong Li (Contact Author)

University of Nevada Las Vegas ( email )

4505 S. Maryland Parkway
Las Vegas, NV 89154
United States

Daniel Shapiro

Independent ( email )

No Address Available

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