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

Panagiotis Piperopoulos, Jie Wu, Chengqi Wang*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

212 Citations (Scopus)


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.

Original languageEnglish
Pages (from-to)232-240
Number of pages9
JournalResearch Policy
Issue number1
Early online date11 Nov 2017
Publication statusPublished - 28 Feb 2018

Bibliographical note

Chengqi Wang is grateful for the financial support from the Natural Science Foundation of China (No. 71563058), the British Academy (SG 150837), from the joint scheme of the Chinese Academy of Social Sciences and government of Ningbo city, China, and from the ‘One Hundred Talent Plan’ of Yunnan Provincial Government. Jie Wu would like to acknowledge the financial support provided by Chinese National Social Science Fund (#14BGL029).


  • China
  • Emerging market enterprises
  • Geographic location
  • Innovation
  • Organizational learning
  • Outward foreign direct investment
  • Subsidiaries


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