Does the Choice of IJV under Institutional Duality Promote the Innovation Performance of Chinese Manufacturing Firms? Evidence from Listed Chinese Manufacturing Companies

Chong Wu, Siyi Bo, Xing Wan, Min Ji, Meihua Chen and Shifan Zhang
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Chong Wu: Business School, Nanjing University of Information Science & Technology, Nanjing 210044, China
Siyi Bo: Business School, Nanjing University of Information Science & Technology, Nanjing 210044, China
Xing Wan: Business School, Nanjing University of Finance &Economics, Nanjing 210046, China
Min Ji: Business School, Nanjing University of Information Science & Technology, Nanjing 210044, China
Meihua Chen: Business School, Nanjing University of Information Science & Technology, Nanjing 210044, China
Shifan Zhang: Business School, Nanjing University of Information Science & Technology, Nanjing 210044, China

Sustainability, 2020, vol. 12, issue 17, 1-21

Abstract: The relationship between the strategic choice of internationalization under institutional duality and the performance of emerging market multinational enterprises (EM-MNEs) will become a focal point for scholars, practitioners and policy makers in the future. In order to better understand the determinants of the entry mode choice under institutional duality for EM-MNEs, based on the sample of Chinese manufacturing listed companies ‘going out’ from 2003 to 2015, we investigated the impact of organization institutional inertia and host-country institutional quality on the choice of the international joint venture (IJV) of Chinese manufacturing firms, as well as the effect and potential problems of the IJV choice on the firms’ innovation performance under institutional duality. The main results of our empirical analyses provide evidence that the response to institutional duality means that Chinese firms have the possibility to choose IJV in entry modes ahead of their capability support, and subject to insufficient professional field accumulation, cross-cultural management and joint governance capability, this premature choice of IJV actually hinders their innovation efficiency. Furthermore, the test on the influence of firm heterogeneity found that, when the firm is privately owned or has a lower internationalization breadth, the above negative moderating effect of IJV choice is more significant. Our findings enrich the literature on the relationship between the strategic choice of internationalization and innovation performance of EM-MNEs, and provide inspiring and straightforward empirical evidence.

Keywords: emerging economies; outward foreign direct investment; international joint venture; firm innovation performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:17:p:6869-:d:403360

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