State Ownership Effect on Firms' FDI Ownership Decisions under Institutional Pressure: A Study of Chinese Outward Investing Firms
This study investigates the effect of state ownership on Chinese firms' foreign direct investment (FDI) ownership decisions. It adopts a political perspective to extend the application of institutional theory in international business research. Specifically, it examines firms' heterogeneou...
| Main Authors: | , |
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| Format: | Journal Article |
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Academy of International Business
2011
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| Online Access: | http://hdl.handle.net/20.500.11937/6005 |
| _version_ | 1848744953946046464 |
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| author | Cui, L. Jiang, Fuming |
| author_facet | Cui, L. Jiang, Fuming |
| author_sort | Cui, L. |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | This study investigates the effect of state ownership on Chinese firms' foreign direct investment (FDI) ownership decisions. It adopts a political perspective to extend the application of institutional theory in international business research. Specifically, it examines firms' heterogeneous responses to external institutional processes during foreign market entry, while taking into consideration the political affiliation of firms with the external institutions. We argue that state ownership creates the political affiliation of a firm with its home country government, which increases the firm's resource-dependence on home country institutions, while at the same time, influences its image as perceived by host country institutional constituents. Such resource-dependence and political perception increase firms' tendency to conform to, rather than resist, isomorphic institutional pressures. We tested our hypotheses using primary data of 132 FDI entries made by Chinese firms during 2000-2006, and we found that the effects of home regulatory, host regulatory, and host normative pressures on a firm to choose a joint ownership structure were stronger when the share of equity held by state entities in the firm was high. |
| first_indexed | 2025-11-14T06:09:40Z |
| format | Journal Article |
| id | curtin-20.500.11937-6005 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T06:09:40Z |
| publishDate | 2011 |
| publisher | Academy of International Business |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-60052017-09-13T16:04:15Z State Ownership Effect on Firms' FDI Ownership Decisions under Institutional Pressure: A Study of Chinese Outward Investing Firms Cui, L. Jiang, Fuming subsidiary ownership institutional theory state ownership Chinese outward FDI This study investigates the effect of state ownership on Chinese firms' foreign direct investment (FDI) ownership decisions. It adopts a political perspective to extend the application of institutional theory in international business research. Specifically, it examines firms' heterogeneous responses to external institutional processes during foreign market entry, while taking into consideration the political affiliation of firms with the external institutions. We argue that state ownership creates the political affiliation of a firm with its home country government, which increases the firm's resource-dependence on home country institutions, while at the same time, influences its image as perceived by host country institutional constituents. Such resource-dependence and political perception increase firms' tendency to conform to, rather than resist, isomorphic institutional pressures. We tested our hypotheses using primary data of 132 FDI entries made by Chinese firms during 2000-2006, and we found that the effects of home regulatory, host regulatory, and host normative pressures on a firm to choose a joint ownership structure were stronger when the share of equity held by state entities in the firm was high. 2011 Journal Article http://hdl.handle.net/20.500.11937/6005 10.1057/jibs.2012.1 Academy of International Business fulltext |
| spellingShingle | subsidiary ownership institutional theory state ownership Chinese outward FDI Cui, L. Jiang, Fuming State Ownership Effect on Firms' FDI Ownership Decisions under Institutional Pressure: A Study of Chinese Outward Investing Firms |
| title | State Ownership Effect on Firms' FDI Ownership Decisions under Institutional Pressure: A Study of Chinese Outward Investing Firms |
| title_full | State Ownership Effect on Firms' FDI Ownership Decisions under Institutional Pressure: A Study of Chinese Outward Investing Firms |
| title_fullStr | State Ownership Effect on Firms' FDI Ownership Decisions under Institutional Pressure: A Study of Chinese Outward Investing Firms |
| title_full_unstemmed | State Ownership Effect on Firms' FDI Ownership Decisions under Institutional Pressure: A Study of Chinese Outward Investing Firms |
| title_short | State Ownership Effect on Firms' FDI Ownership Decisions under Institutional Pressure: A Study of Chinese Outward Investing Firms |
| title_sort | state ownership effect on firms' fdi ownership decisions under institutional pressure: a study of chinese outward investing firms |
| topic | subsidiary ownership institutional theory state ownership Chinese outward FDI |
| url | http://hdl.handle.net/20.500.11937/6005 |