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PurposeEmerging-market multinational enterprises (MNEs) have pushed institutional factors to the cutting-edge of international business research. As for Chinese MNEs, the importance of institutions has been strengthened since the Chinese government launched the Belt and Road Initiative (BRI), which seeks to promote a comprehensive platform for cooperation among countries. This study aims to investigate the role played by the BRI as an institutional factor moderating the influence of other institution-, industry- and firm-specific factors on establishment mode choice by Chinese MNEs.Design/methodology/approachDrawing on the strategy tripod, a perspective claiming that a firm's strategies are the result of internal, industrial and institutional conditions, this study develops a number of hypotheses that are tested with data on 1,076 outward foreign direct investments (OFDIs) of Chinese MNEs between 2013 and 2021.FindingsThe results show that the BRI moderates the influence of both the firm's prior international acquisition experience and Chinese government's OFDI restrictions on the establishment by means of an acquisition. They also report that this moderating effect does not apply for acquisition experience in the host country nor institutional distance.Originality/valueThis study contributes to reinforce the importance of institutions as the third leg of a strategy tripod when explaining international behavior of Chinese MNEs. It also suggests that the BRI is a diplomatic tool that may act as a substitute for the firm's resources and may mitigate the negative influence of other external factors.

As latecomers to the global tourism industry, Chinese multinational enterprises (MNEs) encounter difficulties to engage in outward foreign direct investments relying only on their firm-specific assets. As a result, they usually resort to external resources, combining them with the generic capabilities they possess. One source of these alternative resources derives from the existence of good diplomatic relations between China and other countries. Friendly bilateral relationships may provide Chinese firms with useful institutional support to compensate for their latecomer disadvantages when establishing in foreign destinations. Drawing on the composition-based view and the international political economy perspective, this study argues that the combination of firm's prior international experience and good diplomatic relations between countries is positively associated with location decisions of Chinese tourism MNEs. The findings indicate that high-level government official visits and strategic partnerships contribute to that compositional effect.

Regulations, governance quality, and political structure are important factors that may alter the cost and difficulties associated with doing business in foreign markets. Emerging-market multinationals (EMNEs), with an imperative motivation to go abroad and to be competitive in a global landscape, should consider the impact of administrative distance, namely, the regulatory institutional differences between home and host countries. We suggest that the study of administrative distance is particularly important when addressing investment flows from emerging economies to developed ones, because of the differences between them. Drawing on transaction cost theory and institutional perspective, we analyze the moderating effect of administrative distance on the relationship between other cross-national distance factors—cultural, geographic and economic—and establishment mode choice of EMNEs. From a sample of 357 outward foreign direct investments carried out by Indian firms, our results show that administrative distance moderates the relationship between cultural, geographic and economic distance, and establishment mode decisions.

Drawing on an institutional perspective, this study analyses how state ownership affects the relationship between foreign direct investment (FDI) drivers and establishment mode choice of emerging-market multinational enterprises (EMNEs). We argue that state-owned EMNEs encounter stronger institutional pressures in technology- and natural resource-rich countries derived from concerns about takeovers of local companies. Moreover, in low-growth markets, state-owned EMNEs do not always behave as pure profit-maximisers since they are usually subject to home government institutional influences and pursue policy goals. For these reasons, we hypothesise that their choice between acquisitions and greenfield investments differs from that of privately-owned EMNEs. Our analysis of 643 FDIs undertaken by Chinese companies confirms that state-owned EMNEs are less likely to choose acquisitions in host countries with a higher technology and natural resource endowment. However, the relationship between host market growth and establishment mode is not influenced by state ownership.

This study addresses establishment mode decisions by emerging‐market multinational enterprises entering other emerging economies. More precisely, we examine the influence of prior host country experience and home government official visits on the choice between the acquisition of a local company and the creation of a new subsidiary from scratch. By analyzing 315 investments carried out by Chinese firms in Latin America, we obtain that they are more likely to enter through an acquisition when they have established prior subsidiaries in the host country. Moreover, recent Chinese government official visits contribute to mitigate the difficulties of an acquisition for those companies with less local experience.

Despite cultural differences and political instability, Latin America is already the second main destination of China's outward foreign direct investment (OFDI), only behind Asia. Although natural resource-seeking has been the traditional motivation for Chinese firms doing business in Latin America, market-seeking is also becoming an increasingly important driver. The aim of this study is to investigate the influence of host country factors on the location decisions of Chinese multinational enterprises (MNEs) in Latin America. We analyzed a sample of 106 investments carried out by 52 Chinese MNEs in 10 Latin American countries between 2005 and 2017. Our findings indicate that cultural distance negatively influences location choice by Chinese MNEs, while political risk has no influence. Moreover, market-seeking motivations and good diplomatic relations between China and the host country also matter.

Despite cultural differences and political instability, Latin America is already the second main destination of China's outward foreign direct investment (OFDI), only behind Asia. Although natural resource-seeking has been the traditional motivation for Chinese firms doing business in Latin America, market-seeking is also becoming an increasingly important driver. The aim of this study is to investigate the influence of host country factors on the location decisions of Chinese multinational enterprises (MNEs) in Latin America. We analyzed a sample of 106 investments carried out by 52 Chinese MNEs in 10 Latin American countries between 2005 and 2017. Our findings indicate that cultural distance negatively influences location choice by Chinese MNEs, while political risk has no influence. Moreover, market-seeking motivations and good diplomatic relations between China and the host country also matter.

Drawing on institutional theory, this article examines the importance of decision-specific experience and imitative behaviour of Chinese multinational corporations' (MNCs) foreign ownership structure decisions. From a sample of 189 outward foreign direct investment (FDI) decisions, the authors find strong evidence to support the hypothesis that Chinese firms tend to choose ownership structures based on prior experience with similar ownership structures. Moreover, Chinese firms tend to follow the ownership structure patterns established by earlier Chinese entrants. This article also investigates the moderating effects of cultural distance and host country-specific experience. (China/GIGA)

Purpose: Focusing on the growing importance of Indian multinational corporations in the past decades, this paper aims to understand how establishment mode decisions in a foreign market can differ depending on a series of factors. Specifically, the authors examine how institutional distance, including cultural distance and political risk, could affect these decisions, and how international acquisition experience could moderate this relationship. Design/methodology/approach: The authors test their hypotheses using data from 114 outward foreign direct investments between 2000 and 2010. Findings: The findings suggest that experience in international acquisitions increases the likelihood of subsequent acquisitions in high-risk and culturally distant countries. Originality/value: By considering that the country of origin also matters, some differences among emerging-market multinational corporations (MNCs) may arise. Besides, since empirical research focusing on emerging-market MNCs is scarce, more empirical studies are needed to analyze the influence of cultural distance and political risk on some decisions. In the case of India, there are also additional motivations for analyzing those institutional factors. First, since this is a country with significant linkages to Western countries, it is interesting to know if the influence of cultural distance is similar or not. Second, there is a lack of empirical evidence on the relationship between political risk and establishment mode choice in the case of Indian MNCs. To fill this gap, the first aim of this paper is to analyze how cultural distance and political risk affect the establishment mode choice of Indian MNCs. Moreover, recognizing international experience to be an important factor in explaining international expansion, we focus on international experience interactions with sources of uncertainty inherent in the host market.

Purpose - Drawing on the institutional perspective, the purpose of this paper is to investigate how state ownership moderates the relationships between political risk, inertia and mimetic behavior, and the location choice of Chinese multinational enterprises (MNEs). Design/methodology/approach - The authors argue that state ownership leads Chinese firms to behave toward political risk in an unconventional way, and that government support makes them less dependent on their own and other Chinese firms' prior host country experience. The authors tested the hypotheses using data on outward foreign direct investment (OFDI) decisions made by 186 Chinese firms in 93 countries. Findings - The authors found that Chinese state-owned enterprises (SOEs), compared to non-SOEs, are more likely to move into countries with high political risk, and that they are less likely to be inertial and mimetic. Originality/value - Building on the distinction between macro- and micro-political risk, The authors contribute to the political risk literature by developing several arguments that explains why political risk varies across investing firms in a given host country. Moreover, this is one of the first studies of its kind to investigate the moderating effect of state ownership on the relationship between inertial and mimetic behavior, and the location choice of Chinese MNEs.

The international expansion of emerging-market multinational enterprises (MNEs) is becoming a research topic of increasing interest among international business scholars. One of the specific research questions arising is whether conventional theoretical arguments originated in studies on developed-country MNEs are still valid for explaining the international behavior of emerging-market MNEs. Drawing on the institutional theory, this paper argues that the influence of host country institutional factors on location decisions differs between Chinese and Indian MNEs. We hypothesize that the negative impact of both cultural distance and political risk on location decisions is lower for Chinese MNEs as compared to Indian MNEs. From a sample of 832 outward foreign direct investments (OFDIs) we obtain empirical support for these hypotheses.

The study of Chinese multinationals (MNEs) is becoming one of the most promising research topics in the international business literature. After outlining the distinctive characteristics of the internationalization process of Chinese MNEs, this chapter analyzes the influence of various host country factors on the location of Chinese outward foreign direct investment (FDI). From a sample of 189 outward FDI decisions made by 35 mainland Chinese firms in 63 countries, our results show that host market size and the existence of overseas Chinese in the host country are positively associated with the number of Chinese FDIs. However, greater difficulty in doing business and host country political risk have no effect.