Ownership structure and OFDI by EMNES: the moderating effects of international experience and migrant networks

Changjun Yi, Yun Zhan, Jipeng Zhang and Xiaoyang Zhao

International Journal of Emerging Markets, 2021, vol. 17, issue 10, 2445-2467

Abstract: Purpose - This study investigates the effect of ownership structure – ownership concentration and firm ownership – on outward foreign direct investment (OFDI) by emerging market multinational enterprises (EMNEs), and further explores the moderating effects of international experience and migrant networks on this relationship. Design/methodology/approach - Data of Chinese MNEs listed on Shenzhen and Shanghai stock exchanges between 2005 and 2016 are used. The empirical analysis is based on the negative binomial regression model. Findings - The empirical results reveal a significant inverted-U relationship between ownership concentration and OFDI by EMNEs. State ownership is found to have a positive effect on OFDI by EMNEs. Both international experience and migrant networks strengthen the inverted-U relationship between ownership concentration and OFDI as well as the positive effect of state ownership on OFDI by EMNEs. Practical implications - EMNEs need to maintain a moderate ownership concentration when conducting OFDI, and they are supposed to make full use of their own international experience and focus on migrant networks of the host country. Policy-makers in emerging economies need to better create a fair business environment for enterprises. Originality/value - Combining agency theory and the resource-based view, this study integrates ownership structure, firm-level heterogeneous resources – international experience and country-level heterogeneous resources – migration networks into a framework to study OFDI by EMNEs, which expands the scope of research in international business.

Keywords: Outward foreign direct investment; Ownership concentration; State ownership; International experience; Migrant networks; Emerging market multinational enterprises (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijoemp:ijoem-07-2020-0807

DOI: 10.1108/IJOEM-07-2020-0807

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