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Publication Details
AFRICAN RESEARCH NEXUS
SHINING A SPOTLIGHT ON AFRICAN RESEARCH
business, management and accounting
FDI by firms from newly industrialised economies in emerging markets: Corporate governance, entry mode and location
Journal of International Business Studies, Volume 38, No. 4, Year 2007
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Description
Previous studies emphasise that the foreign direct investment (FDI) strategies of firms from newly industrialised economies (NIEs) are different from the FDI strategies of firms from developed economies. It has also been shown that NIE firms are often controlled by founding families who make key strategic decisions, and that they rely heavily on network linkages when developing their FDI strategies. What is less clear, however, is how the corporate governance factors in NIEs, the risk preferences of the main shareholder constituencies, and the network-based business culture affect the decision to undertake FDI in emerging markets. This paper explores the entry mode and location choices of firms from an Asian NIE (Taiwan) in an emerging market (the People's Republic of China). It shows that the choice of equity stake in an affiliate depends upon the extent of family and institutional share ownerships in the parent company. High-commitment entry is found to be positively associated with the affiliate being located in areas with strong economic, cultural and historic links with the parent company. Furthermore, the entry mode and location decisions appear to be interrelated, with the parent's equity stake in the affiliate depending inter alia upon the location within China, and the favoured location depending inter alia upon the equity stake. © 2007 Academy of International Business. All rights reserved.
Authors & Co-Authors
Filatotchev, Igor
United Kingdom, London
King's College London
Strange, Roger N.
United Kingdom, London
King's College London
Piesse, Jenifer
United Kingdom, London
King's College London
South Africa, Stellenbosch
Stellenbosch University
Lien, Yung Chih
Taiwan, Keelung
National Taiwan Ocean University
Statistics
Citations: 413
Authors: 4
Affiliations: 3
Identifiers
Doi:
10.1057/palgrave.jibs.8400279
ISSN:
00472506
Research Areas
Health System And Policy