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Drawing on institutional theory, we argue that the likelihood of a Chinese firm adopting an isomorphic strategy in outward foreign direct investment (OFDI) depends on the influence of external isomorphic pressures (domestic regional isomorphic pressure and domestic industrial isomorphic pressure) and its internal legitimacy-seeking motivation. The analyses of 107 Chinese listed firms with 535 observations during 2008-2012 offer supportive evidence for our arguments. Our study serves to provide comprehensive insights into the motives behind the OFDI of Chinese firms and make contributions to a better understanding of regional diversity and industrial diversity in China.Keywords: domestic isomorphic pressures; state ownership; firm size; outward foreign direct investment IntroductionIsomorphism denotes a constraining process whereby a focal organization models itself on other organizations in its environment (Meyer and Rowan, 1977). The institutional perspective posits that organizations choose to adopt an isomorphic strategy primarily to gain legitimacy when they experience external isomorphic pressure (DiMaggio and Powell, 1983). Based on this institutional rationale, several studies examine the role of external isomorphic pressure in the strategic choices of 2 firms in foreign direct investment (FDI) (Davis et al, 2000;Yiu and Makino, 2002;Yang, 2009; Li and Parboteeah, 2015). Although these studies find that firms tend to conform to external isomorphic pressure by adopting similar FDI strategies, they have not fully accounted for the fact that the isomorphic behaviors of firms within a given institutional context are also heterogeneous and vary with firm-specific characteristics such as ownership features and firm size (Huang and Chi, 2014;Young and Makhija, 2014). Indeed, these firm attributes can also lead to differences in legitimacy-seeking motivation, subsequently causing variations in the influence of isomorphic pressures on the internationalization strategy or behavior of these firms. Based on this premise, we argue that the likelihood of a firm adopting an isomorphic strategy is the outcome of the interplay between external isomorphic pressure and its internal legitimacy-seeking motivation.We examine our argument through analyzing the OFDI activities adopted by Chinese firms. For these firms, OFDI activities can be regarded as an isomorphic behavior to obtain legitimacy from legitimating actors who bestow endorsement by supplying resources to legitimated firms (Yamakawa et al, 2008;Yang, 2009).Because of the decentralization and market liberalization involved in the economic reform of China, regional governments and market stakeholders act as important legitimating actors (Park et al, 2006). Chinese firms must compete for legitimacy of these legitimating actors with their peers within the same region and/or the same industry (Abrahamson and Rosenkopf, 1993;Basdeo et al, 2006). Therefore, Chinese 3 firms need to cope with both domestic regional isomorphic pressure and domestic industrial pre...

Purpose-Based on the linkage-leverage-learning (LLL) framework developed by Mathews (2006), this study aims to examine how linking, leveraging and learning capabilities influence the foreign-entry mode choice and the way such influences are contingent on context factors in the emerging markets. Design/methodology/approach-Contrary to prior literature applying the LLL framework, which mainly used case studies, this paper adopts a quantitative approach and is based on a sample of 321 Chinese listed companies to test hypotheses. Findings-The results show that multinational firms from emerging markets (EMFs) with stronger LLL capabilities are more likely to choose the wholly-owned mode in foreign entries. Further, the relationship between linking capability and wholly-owned entry mode choice is weaker at higher levels of cultural distance between home and host country, whereas the relationship between learning capability and wholly-owned entry mode choice is weaker at higher levels of cultural distance between home country and host country and of institutional distance between prior entries and the focal entry. Research limitations/implications-Recommend entry mode strategy for firms without ownership advantages and identify the boundary conditions for applying different LLL capabilities. The generalizability of the findings from a single country setting still need further validations with other emerging economies. Originality/value-This paper treats internationalization of firms from emerging country in a different perspective. The underlying idea in this study is that internationalization is not only a process for EMFs to utilize externally accessible assets to overcome liabilities of foreignness abroad, but also a process of simultaneously combining internationalization with experiential learning and capability utilization in overseas markets. Further, we also contribute by providing strong empirical evidence for validating the LLL model and extending the existing entry mode studies.