Subnational Institutions and Outward FDI by Chinese Firms
This study extends the classic country-specific advantage (CSA) – firm-specific advantage (FSA) framework by integrating an institution-based view of CSAs into the discussion of FSAs. In his classic CSA – FSA framework, Alan Rugman suggests that successful multi-national enterprises (MNEs) are often built on the interaction between strong FSAs and strong CSAs at home. In the case of emerging market multi-nationals (EMNEs), he argued that strong CSAs were of particular importance in allowing EMNEs to develop FSAs. In particular, the authors examine CSAs at the sub-national level. Using a unique data set on overseas investment by Chinese firms and causal mediation analysis, the authors find strong evidence in support of the view that strong sub-national institutions help emerging market firms develop the capabilities to enter developed country markets.
This piece is viewable at https://www.researchgate.net/publication/283740310_Subnational_instituti... and was originally published in The Multinational Business Review, Vol. 23, No. 4 (2015). Copyright remains with the authors and MBR as originally assigned.
**Posting of this report does not represent an endorsement by the Mr. & Mrs. S.H. Wong Center for the Study of Multinational Corporations and has been done to facilitate research and promote debate about multinational corporations/FDI in and from East Asia.