Exploring the linkage between smart manufacturing technology and outward foreign direct investment in the new digital information age

Penghua Qiao, Kaizhong Qiu, Anna Fung, Jot Yau and Hung-Gay Fung

Research in International Business and Finance, 2025, vol. 79, issue C

Abstract: Multinational corporations (MNCs) must strategically harness their core competencies to overcome internal challenges and external barriers. In today’s digital age, integrating smart technology into all operations—relying on real-time, accurate data—enables companies to make informed decisions, including those related to outward foreign direct investment (OFDI). Our research shows that firms using smart manufacturing technology (SMT) are more likely to pursue OFDI, as it provides timely insights that remove uncertainty in the decision-making process. SMT, in particular, fuels innovation and accelerates progress toward environmental, social, and governance (ESG) objectives, significantly stimulating OFDI. By overcoming geographical, cultural, and institutional barriers, it expands OFDI while reinforcing sustainability and fostering a more interconnected global business landscape. The impact of technology on OFDI is especially significant in MNCs with tech-savvy leadership, minimal local cultural constraints, and supportive government policies. This study highlights the crucial role of smart technology in driving OFDI in the contemporary digital era.

Keywords: Smart manufacturing technology; OFDI; Corporate innovativeness; Geographical, Institutional and cultural distances; ESG; New digital information age (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:79:y:2025:i:c:s0275531925003113

DOI: 10.1016/j.ribaf.2025.103055

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