Home-country measures to support outward foreign direct investment: variation and consequences

Abstract

The state, especially in emerging economies, plays a key role in influencing firm behaviour, including outward foreign direct investment (OFDI). Often literature on the state's influence on OFDI stresses direct state ownership. However, the state can influence OFDI in several ways, including policy support and subsidies; the literature has largely overlooked these effects. We build on key insights from the comparative capitalisms literature to put forward a series of propositions on how home-country measures-in both emerging and developed economies-to boost OFDI will influence, inter alia, the volume, location and mode of firms' investments abroad. We thus contribute to the literature by showing how government policies across a wide range of countries influence an important aspect of firm behaviour that has economic, social and environmental implications.

Political and productive capacity characteristics as outward foreign direct investment push factors from BRICS countries

“…Alternatively, the Lindex long-term coefficient was considerably higher than the short-term coefficient and the relative coefficients of the other variables in the long term. This result confirms the main research hypothesis of the significant effect of political stability on the home country's ability to establish OFDI (Buitrago & Camargo, 2020;Ciesielska-Maciagowska & Koltuniak, 2021;Becker-Ritterspach et al, 2019;Tallman, 1988). The results of the ARDL model initiated a deeper analysis of the impact of political stability shocks, in addition to the other explanatory variables, on OFDI in BRICS.…”

“…Bulatov (2017) added that the Russian Federation and other BRICS economies have unfavorable business climates compared to leading developed economies, and this drives firms to escape the domestic market and invest in a more convenient international market. This argument was also supported by Buitrago, Camargo (2020), Ciesielska-Maciagowska and Koltuniak (2021), Becker-Ritterspach et al (2019), andTallman (1988). According to Miniesy and Elish (2017) and Ciesielska-Maciagowska and Koltuniak (2021), home-country institutional factors affect the scale of OFDI.…”

Setembro 2021/Dezembro 2021

“…Liderança e protagonismo internacionais atingidos pelos alemães não ocorreram, entretanto, por acaso. Considerando a categorização proposta por Becker-Ritterspach et al (2019), o Estado alemão pode ser considerado um híbrido entre os tipos desenvolvimentista e corporativista. Isso porque ele age ativamente para estimular a internacionalização das empresas locais, de forma segura e com instrumentos que visam proteger os investimentos externos alemães.…”

Home-country export regulations, credit markets, and corruption: implications for different types of internationalization

“…Many countries have undertaken significant policy interventions in the form of regulatory reforms intending to promote internationalization (Stoian and Mohr, 2016;Becker-Ritterspach et al, 2019) for domestic firms to achieve growth in foreign markets. Exports and outward foreign direct investment (OFDI) are two types of internationalization activities that differ in motivation and process, required resources, cost structure and associated risk (Benacek et al, 2000;Asamoah et al, 2019).…”