FDI expansion speed of state-owned enterprises and the moderating role of market capitalism: Evidence from China |
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| Institution: | 1. Department of International Business, National Taiwan University, No. 1, Section 4, Roosevelt Road, Taipei 106, Taiwan, ROC;2. Sir John Cass Business School, City University London, 106 Bunhill Row, London EC1Y 8TZ, UK;3. Vienna University of Economics and Business, Austria;1. School of Economic Sciences and Administration, Frederick University, 7, Y. Frederickou Street, Pallouriotisa, Nicosia, 1036, Cyprus;2. Department of Economics, University of Piraeus, Karaoli & Dimitriou 80, 18534 Piraeus, Greece;1. Jackstädt Center of Entrepreneurship and Innovation Research, University of Wuppertal, Gaußstraße 20, 42119 Wuppertal, Germany;2. RWI – Leibniz-Institut für Wirtschaftsforschung, Hohenzollernstrasse 1-3, 45128 Essen, Germany;3. Hochschule Stralsund – University of Applied Sciences, Zur Schwedenschanze 15, 18435 Stralsund, Germany;2. Macquarie Graduate School of Management, Macquarie University, Sydney, NSW 2109, Australia |
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| Abstract: | Drawing on an institutional logics perspective and isomorphism viewpoint, we posit that the negative impact of state ownership on the speed of foreign direct investment (FDI) expansion is attributed to the state socialism logic, which is inconsistent with market-oriented mechanisms that underpin rapid international expansion. We further argue that firms associated with the market capitalism logic shape an institutional context in which state-owned enterprises (SOEs) may adjust their behaviors by adopting market-oriented practices to expand quickly in the global market. Using outward FDI project information from Chinese listed firms over a fourteen-year period, we find evidence that confirms our theoretical predictions. Our analysis shows that, despite the negative relationship between state ownership and the speed of an SOE’s FDI expansion, both the non-state economy in the firm’s subnational region and privately owned enterprises in its industry sector positively moderate this relationship. This study enriches our understanding of institutional complexity in emerging markets and internationalization of emerging-market firms. |
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| Keywords: | State-owned enterprise Private economy Institutional logics Outward foreign direct investment International expansion speed China |
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