Performance feedback on sales growth goal and OFDI location choices for firms in emerging economies

En Xie, Alex Junyi Fang, Xin Chen, Zhan Wu and Vikas Kumar

Journal of World Business, 2022, vol. 57, issue 4

Abstract: This study explores the influence of performance feedback relative to sales growth on emerging economy firms’ (EEFs) outward foreign direct investment (OFDI) in developed and developing economies. It takes a global value chain perspective to examine whether performance feedback motivates EEFs’ location choice for OFDI. Using listed Chinese firms’ data, we find negative performance feedback relative to sales growth motivates EEFs to increase OFDI in developing economies but reduce it in developed economies. However, positive feedback relative to sales growth reduces it in both developed and developing economies. We contribute to OFDI location choice literature by including a behavioral perspective.

Keywords: Behavioral theory of firms; Performance feedback; Sales growth; OFDI; Emerging economies; Location choice (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (9)

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DOI: 10.1016/j.jwb.2022.101343

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