TY - JOUR
T1 - Location choice of Chinese outward FDI – An ethnicity-based population ecology perspective
AU - Zhu, Hua
AU - Cantwell, John
AU - Jia, Fei
AU - Wang, Chengqi
N1 - Funding Information: This study was funded by the National Natural Science Foundation of China (Project No. 71702026 ), and the Social Science Planning Foundation of Liaoning Province (Project No. L21ZD049 ). We are also thankful to the anonymous reviewers of this journal as well as reviewers from the 2019 AIB conference for their valuable and insightful suggestions. Publisher Copyright: © 2022 Elsevier Inc.
PY - 2023/2
Y1 - 2023/2
N2 - Drawing on population ecology theory (PET) which conceptualizes an individual organization's survival as a result of organizational changes at the population level, we explain why multinational enterprises (MNEs) from emerging markets prefer to enter countries with an existing population of co-national peers. Our study of a sample of Chinese MNEs shows that the size of co-national MNEs population in the host country has a positive effect on new FDI entries by firms from the same home country. Interestingly, the co-province and co-industry-formed organizational population in the host country has an inverted U-shaped effect on the new FDI entries, and that provincial dialect and co-national immigrants flatten this curvilinear effect. We also analyze how the focal relationships vary between host countries with different levels of economic development and between different industries. Our study contributes to the research of FDI location choices by providing a population ecology-based explanation that differs fundamentally from those based on agglomeration economics and institutional theory. The study also advances PET by theorizing how legitimizing and competing forces interact to jointly influence the way the extant population of certain types of organizations influences the entries of the same type of organizations into the population.
AB - Drawing on population ecology theory (PET) which conceptualizes an individual organization's survival as a result of organizational changes at the population level, we explain why multinational enterprises (MNEs) from emerging markets prefer to enter countries with an existing population of co-national peers. Our study of a sample of Chinese MNEs shows that the size of co-national MNEs population in the host country has a positive effect on new FDI entries by firms from the same home country. Interestingly, the co-province and co-industry-formed organizational population in the host country has an inverted U-shaped effect on the new FDI entries, and that provincial dialect and co-national immigrants flatten this curvilinear effect. We also analyze how the focal relationships vary between host countries with different levels of economic development and between different industries. Our study contributes to the research of FDI location choices by providing a population ecology-based explanation that differs fundamentally from those based on agglomeration economics and institutional theory. The study also advances PET by theorizing how legitimizing and competing forces interact to jointly influence the way the extant population of certain types of organizations influences the entries of the same type of organizations into the population.
KW - Chinese firms
KW - Co-industry population
KW - Co-provincial population
KW - Ethnicity-based population ecology
KW - Outward FDI, location choice
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U2 - 10.1016/j.intman.2022.100983
DO - 10.1016/j.intman.2022.100983
M3 - Article
SN - 1075-4253
VL - 29
JO - Journal of International Management
JF - Journal of International Management
IS - 1
M1 - 100983
ER -