Why Did They Get in Trouble? The Influence of Firm Characteristics and Institutional Distance in the Case of Chinese Outward Foreign Direct Investment

Posted: 24 Jun 2020

See all articles by Abdelkader Mohamed Sghaier Derbali

Abdelkader Mohamed Sghaier Derbali

Department of Administrative and Financial Sciences and Techniques, Applied College, Taibah University, Saudi Arabia

Date Written: January 29, 2020

Abstract

Existing research on Chinese multinational companies has overlooked the fact that China’s outward foreign direct investment is facing a high failure rate even in their initial attempt to enter a foreign market. Grounded on institutional theory, this study provides a more holistic view of the globalization dynamic using a unique dataset that contains both successful and failed Chinese outward foreign direct investment attempts during the year 2017 to 2018. Firm characteristics have an important influence on the probability of successful foreign market entry attempt, but the effect is conditioned on institutional discrepancies between China and host countries.

Keywords: Chinese OFDI, Market Entry Attempt, Firm Characteristics, Institutional Distance

JEL Classification: O24, G23, F23

Suggested Citation

Derbali, Abdelkader Mohamed Sghaier, Why Did They Get in Trouble? The Influence of Firm Characteristics and Institutional Distance in the Case of Chinese Outward Foreign Direct Investment (January 29, 2020). Available at SSRN: https://ssrn.com/abstract=3615046

Abdelkader Mohamed Sghaier Derbali (Contact Author)

Department of Administrative and Financial Sciences and Techniques, Applied College, Taibah University, Saudi Arabia ( email )

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