Outward FDI, location choices and innovation performance of emerging market enterprises

Piperopoulos, Panagiotis and Wu, Jie and Wang, Chengqi (2018) Outward FDI, location choices and innovation performance of emerging market enterprises. Research Policy, 47 (1). pp. 232-240. ISSN 0048-7333

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Although prior research conceptualizes how knowledge-seeking motivates the internationalization of emerging-market enterprises (EMEs), whether outward foreign direct investment (OFDI) indeed leads to enhanced innovation performance has received limited attention. We address this subject by conceptualizing how Chinese EMEs’ OFDI enhances their subsidiaries’ organizational learning and innovation performance and whether geographic location choices influence this relationship. Our panel data analysis of Chinese EMEs shows that OFDI has a positive effect on innovation performance of Chinese EMEs’ subsidiaries and that this effect is stronger when the OFDI is directed towards developed rather than emerging countries. These findings advance the notion that EMEs can use OFDI as a strategy to globalize R&D and enhance their innovation performance and demonstrate that certain established assumptions regarding organizational learning are not valid for EMEs.

Item Type: Article
Keywords: Outward Foreign Direct Investment; Innovation; Organizational Learning; Geographic Location; Subsidiaries; Emerging Market Enterprises; China
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > Nottingham University Business School
Identification Number: https://doi.org/10.1016/j.respol.2017.11.001
Depositing User: Eprints, Support
Date Deposited: 08 Nov 2017 12:16
Last Modified: 12 Jan 2018 00:21
URI: http://eprints.nottingham.ac.uk/id/eprint/47965

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