 Expanding near the home base or venture far? The influence of home country state on the economic distance of foreign direct investmentsLin Cui and Xiaoming He Journal of Business Research, 2017, vol. 75, issue C, 95-107 Abstract: The extent of the economic distance between a firm's home origin and its foreign direct investment (FDI) is an important strategic decision for the investing firm. This study fills an important knowledge gap by investigating the home institutional antecedents of FDI economic distance. Drawing insights from comparative institutionalism, we argue that home-country states vary in both their power to coordinate the economy and the external and internal channels through which they exercise that power. These variations have implications on a firm's motivation and capability to escape external dependencies on the home-country state by investing in economically distant foreign locations. Empirically, using a dataset of 891 new international entrants from 2004 to 2011, we found support for our hypotheses that home-country state power is positively associated with FDI economic distance, and that the influence of the home-country state is contingent on the state's governance quality and its ownership in firms. Keywords: Foreign direct investment; Comparative institutionalism; State power; Governance quality; State ownership; Economic distance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:75:y:2017:i:c:p:95-107 DOI: 10.1016/j.jbusres.2017.02.011 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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