Chinese multinationals: how do institutional factors affect their location patterns?

• Main Authors: Diego Quer Ramón, Enrique Claver Cortés, Laura Rienda García
• Format: Article
• Language: English
• Published: Universidad del País Vasco (UPV/EHU) 2011-11-01
• Series: Management Letters/Cuadernos de Gestión
• Subjects: Emerging-market multinationals; China; institutional factors; location patterns; foreign direct investment
• Online Access: http://www.ehu.es/cuadernosdegestion/revista/index.php/en/numeros?a=da&y=2011&v=11&n=2&o=4

This paper analyses the impact of various host country institutional factors on the location patterns of 29 large Chinese multinationals. From a sample of 127 outward foreign direct investment (FDI) decisions made in 52 countries, our findings suggest that a greater difficulty in doing business and a high political risk in the host country do not discourage Chinese multinationals. However, the presence of overseas Chinese in the host country, a larger absolute host market size and a higher volume of Chinese exports to that country affect positively.