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Pro-market institutions and outward FDI of emerging market firms: an institutional arbitrage logic

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dc.contributor.authorTang, R.W.
dc.date.issued2021
dc.descriptionData source: Supplementary data, https://doi.org/10.1016/j.ibusrev.2021.101814
dc.description.abstractWe offer new theory and evidence regarding the effects of pro-market institutions on outward foreign direct investment (FDI) of emerging market firms (EMFs). Drawing on the logic of institutional arbitrage, we integrate the escapism and exploitation mechanisms of EMF internationalization into a unified theoretical context. We propose an inverted U-shaped relationship between host market-supporting institutions (MSI) and the investment scale of an EMF’s FDI project in the country, showing an escape-driven upward slope for low-to-medium MSI levels and an exploitation-driven downward slope for medium-to-high MSI levels. We supplement this main argument with two boundary conditions: the alleviating effect of home market liberalization (HML) and the strengthening effect of home government subsidies (HGS), demonstrating the coexistence and variation of pro- and anti- market institutions in an emerging market. Using information on 1,450 FDI projects conducted by 288 Chinese listed firms in 116 host countries, we obtain supportive evidence for the predicted relationships between the three institutional forces. This study enriches the literatures on institutional arbitrage and pro-market institutions with evidence from EMFs.
dc.identifier.citationInternational Business Review, 2021; 30(3, article no. 101814):1-15
dc.identifier.doi10.1016/j.ibusrev.2021.101814
dc.identifier.issn0969-5931
dc.identifier.urihttps://hdl.handle.net/11541.2/145994
dc.language.isoen
dc.publisherElsevier
dc.rightsCopyright 2021 Elsevier
dc.source.urihttps://doi.org/10.1016/j.ibusrev.2021.101814
dc.subjecthost market-supporting institutions
dc.subjecthome market liberalization
dc.subjecthome government subsidies
dc.subjectemerging market firms
dc.subjectoutward foreign direct investment
dc.subjectinstitutional arbitrage logic
dc.titlePro-market institutions and outward FDI of emerging market firms: an institutional arbitrage logic
dc.typeJournal article
pubs.publication-statusPublished
ror.mmsid9916484005501831

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