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Location choice of Chinese outward FDI – An ethnicity-based population ecology perspective

Zhu, Hua; Cantwell, John; Jia, Fei; Wang, Chengqi

Authors

Hua Zhu

John Cantwell

Fei Jia

CHENGQI WANG CHENGQI.WANG@NOTTINGHAM.AC.UK
Professor of Strategy & International Business



Abstract

Drawing on population ecology theory (PET) which conceptualizes an individual organization's survival as a result of organizational changes at the population level, we explain why multinational enterprises (MNEs) from emerging markets prefer to enter countries with an existing population of co-national peers. Our study of a sample of Chinese MNEs shows that the size of co-national MNEs population in the host country has a positive effect on new FDI entries by firms from the same home country. Interestingly, the co-province and co-industry-formed organizational population in the host country has an inverted U-shaped effect on the new FDI entries, and that provincial dialect and co-national immigrants flatten this curvilinear effect. We also analyze how the focal relationships vary between host countries with different levels of economic development and between different industries. Our study contributes to the research of FDI location choices by providing a population ecology-based explanation that differs fundamentally from those based on agglomeration economics and institutional theory. The study also advances PET by theorizing how legitimizing and competing forces interact to jointly influence the way the extant population of certain types of organizations influences the entries of the same type of organizations into the population.

Citation

Zhu, H., Cantwell, J., Jia, F., & Wang, C. (2023). Location choice of Chinese outward FDI – An ethnicity-based population ecology perspective. Journal of International Management, 29(1), Article 100983. https://doi.org/10.1016/j.intman.2022.100983

Journal Article Type Article
Acceptance Date Aug 30, 2022
Online Publication Date Sep 14, 2022
Publication Date 2023-02
Deposit Date Sep 7, 2022
Publicly Available Date Sep 15, 2024
Journal Journal of International Management
Print ISSN 1075-4253
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 29
Issue 1
Article Number 100983
DOI https://doi.org/10.1016/j.intman.2022.100983
Keywords Strategy and Management; Finance; Business and International Management
Public URL https://nottingham-repository.worktribe.com/output/10913068
Publisher URL https://www.sciencedirect.com/science/article/abs/pii/S1075425322000588