Regulatory Institutions and Chinese Outward FDI: An Empirical Review

Multinational Business Review, Forthcoming

38 Pages Posted: 18 Jan 2015 Last revised: 22 Feb 2018

See all articles by Victor Zitian Chen

Victor Zitian Chen

University of North Carolina, Charlotte; University of North Carolina (UNC) at Charlotte - The Belk College of Business Administration

Yuanyuan Li

Rutgers University, Newark, Students

Sara Hambright

The Vanguard Group, Inc.

Date Written: June 3, 2016

Abstract

Purpose: This paper seeks to review the effects of home regulatory institutions on outward FDI (OFDI) in the context of China and discuss the extent to which they can be extended to other emerging markets. We especially compare these empirical studies with theoretical discussions in each category, identify research gaps, and suggest future research ideas. Practical implications are discussed.

Design/methodology/approach: It focuses specifically on three categories of regulatory institutions, including overall institutional development, liberalization of OFDI policies, and state ownership (and its closely approximate forms). Using a systematic review, this paper has reviewed 26 empirical studies (23 quantitative and 3 qualitative studies) published in peer-reviewed journals.

Findings: These studies suggest that overall institutional development towards a market economy in general leads to increased OFDI, but this effect is contingent on the stage of such development and the capabilities of Chinese multinationals. Liberalized and supportive OFDI policies also facilitate OFDI activities, but only into selective areas. Findings on state ownership have been mixed.

Originality/value: This review offers a full picture of empirical evidence on how multiple levels of regulatory institutions affect OFDI from China. In this way, we can identify the research gaps between theoretical discussions on home institutions and OFDI and empirical evidence. Thus we make suggestions for future directions of studies.

Keywords: Regulatory institutions; Outward FDI; China, Emerging markets; Empirical review

JEL Classification: K2, F2, F3, F4, P2, N45

Suggested Citation

Chen, Victor Zitian and Li, Yuanyuan and Hambright, Sara, Regulatory Institutions and Chinese Outward FDI: An Empirical Review (June 3, 2016). Multinational Business Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2551236 or http://dx.doi.org/10.2139/ssrn.2551236

Victor Zitian Chen (Contact Author)

University of North Carolina, Charlotte ( email )

The Belk College of Business
Charlotte, NC 28223

HOME PAGE: http://www.ChenZitian.com/

University of North Carolina (UNC) at Charlotte - The Belk College of Business Administration ( email )

The Belk College of Business
Charlotte, NC 28223

HOME PAGE: http://www.ChenZitian.com/

Yuanyuan Li

Rutgers University, Newark, Students ( email )

Newark, NJ
United States

Sara Hambright

The Vanguard Group, Inc. ( email )

100 Vanguard Blvd
Malvern, PA 19355
United States

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