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Institutional compatibility and the internationalization of Chinese SOEs: The moderating role of home subnational institutions
Affiliation:1. Beedie School of Business, Simon Fraser University, 8888 University Drive, Burnaby, British Columbia, V5A 1S6, Canada;2. Jindal School of Management, University of Texas at Dallas, 800 West Campbell Rd, Richardson, TX 75080, United States;3. Management School, Jinan University, 601 Huangpu Avenue West, Guangzhou, China;1. Beedie School of Business, Simon Fraser University, 8888 University Drive, Burnaby, British Columbia, V5A 1S6, Canada;2. Jindal School of Management, University of Texas at Dallas, 800 West Campbell Rd, Richardson, TX 75080, United States;3. Management School, Jinan University, 601 Huangpu Avenue West, Guangzhou, China;1. Gordon Institute of Business Science, University of Pretoria, 25 Fricker Road, Illovo, Johannesburg, 2146, South Africa;2. University of Sussex, Jubilee Building, Falmer, Brighton, BN1 9RH, UK;3. Graduate School of Business, University of Cape Town, 8 Portswood Road, V&A Waterfront, Cape Town, 8002, South Africa;1. FUMEC University, Av. Afonso Pena 3880, Cruzeiro, 30130-009, Belo Horizonte, Brazil;2. Rotterdam School of Management, The Netherlands;3. NUS Business School, National University of Singapore, Department of Strategy and Policy, Mochtar Riady Building, #6-51, 15 Kent Ridge Drive, 119245, Singapore;1. The Chinese University of Hong Kong, Department of Management, Shatin, N.T., Hong Kong;2. University of Reading, Henley Business School, Department of Leadership, Organisations and Behaviour, Henley Center for Entrepreneurship, Whiteknights, Reading RG6 6UDE, United Kingdom;3. Faculty of Business Administration, University of Macau, Avenida da Universidade, Taipa, Macau;1. College of Management and Economics, Tianjin University, 92 Weijin Road, Tianjin, China;2. Department of Management, The Walker School of Business, Appalachian State University, 4066 Peacock Hall, 416 Howard Street, Boone, NC 28607, United States;3. Schulich School of Business, York University, Toronto, Ontario M3J 1P3, Canada;1. Universidad Adolfo Ibáñez, Escuela de Negocios, Av Diagonal Las Torres 2640, Peñalolén, Santiago, 7941169, Chile;2. Washington and Lee University, Williams School of Commerce, Economics and Politics, 204W. Washington St, Lexington, VA 24450, United States;3. University of Colorado-Boulder, Leeds School of Business, 419 UCB, Boulder, CO 80309, United States;1. Universidad Pontificia Comillas, ICAI-ICADE. Facultad de Ciencias Económicas y Empresariales, Dep. Gestión Empresarial, C/Alberto Aguilera, 23, E-28015 Madrid, Spain;2. Universidad de Oviedo, Facultad de Economía y Empresa, Dep. Admón. de Empresas, Avda. del Cristo S/N, E-33071 Oviedo, Spain;3. The Wharton School, University of Pennsylvania, 2016 Steinberg-Dietrich Hall, Philadelphia, PA 19104-6370, USA
Abstract:This study investigates the outward foreign direct investment (OFDI) of state-owned enterprises (SOEs) through the lens of the mechanism of institutional compatibility. Drawing on institutional theory, we argue that institutional compatibility (thus legitimacy) at home and institutional incompatibility (thus lack of legitimacy) abroad reduce SOEs’ OFDI activities. However, we also argue that home-country subnational factors (coercive, normative, and mimetic forces) provide a potentially offsetting effect. Using a sample of publicly listed Chinese firms, we find that coercive and mimetic forces generated from home subnational institutions reduce the negative effect of state ownership on OFDI activity.
Keywords:State-owned enterprise  Outward foreign direct investment  Coercive pressure  Normative support  Mimetic influence  Institutional theory  Subnational institutions
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