Is it possible to escape? Local protectionism and outward foreign direct investment by Chinese privately-owned enterprises

Research output: Contribution to journalArticle

Authors

External organisations

  • School of Management, Zhejiang University

Abstract

This study explores the impact of local protectionism on outward foreign direct investment (OFDI) and how firms respond to local protectionism in a transition economy. We find that local protectionism exerts a negative effect on the OFDI decisions of Chinese privately-owned enterprises (POEs). However, this negative impact is weakened by POEs’ corporate philanthropy strategy, whereas corporate political activity reinforces such an impact. This research extends the lens of institutional escapism by highlighting local protectionism as a barrier to OFDI and provides new insights into how firms respond to the subnational environment by adopting various nonmarket strategies.

Details

Original languageEnglish
Number of pages26
JournalAsia Pacific Journal of Management
Early online date21 Dec 2019
Publication statusE-pub ahead of print - 21 Dec 2019

Keywords

  • OFDI decisions, Subnational governments, Local protectionism, Corporate philanthropy, Corporate political activity, Privately-owned enterprises