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

Panagiotis Piperopoulos; Jie Wu; Chengqi Wang

doi:10.1016/j.respol.2017.11.001

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

Panagiotis Piperopoulos, Jie Wu, Chengqi Wang^*

^*Corresponding author for this work

Business Management

Research output: Contribution to journal › Article › peer-review

212 Citations (Scopus)

Abstract

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 language	English
Pages (from-to)	232-240
Number of pages	9
Journal	Research Policy
Volume	47
Issue number	1
Early online date	11 Nov 2017
DOIs	https://doi.org/10.1016/j.respol.2017.11.001
Publication status	Published - 28 Feb 2018

Bibliographical note

Acknowledgements
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).

Keywords

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

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.respol.2017.11.001Licence: Unspecified

Cite this

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

abstract = "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{\textquoteright} OFDI enhances their subsidiaries{\textquoteright} 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{\textquoteright} 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.",

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author = "Panagiotis Piperopoulos and Jie Wu and Chengqi Wang",

note = "Acknowledgements 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 {\textquoteleft}One Hundred Talent Plan{\textquoteright} of Yunnan Provincial Government. Jie Wu would like to acknowledge the financial support provided by Chinese National Social Science Fund (#14BGL029).",

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N1 - Acknowledgements 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).

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N2 - 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.

AB - 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.

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

Abstract

Bibliographical note

Keywords

UN SDGs

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Jie Wu

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

Abstract

Bibliographical note

Keywords

UN SDGs

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Jie Wu

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