Rapid FDI expansion and firm performance

Chang, Sea‐Jin; Rhee, Jay Hyuk

doi:10.1057/jibs.2011.30

Cited by 223 publications

(217 citation statements)

References 72 publications

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“…Our measure of internationalization speed thus captures retailers' recent international expansion. 5 We also test an alternative measure of internationalization speed that captures the speed of retailers' expansion over a longer term using the average number of foreign outlets divided by the number of years since the firm's first international expansion (Chang & Rhee, 2011;Vermeulen & Barkema, 2002). We discuss the results for this alternative measure below.…”

Section: Methodsmentioning

confidence: 99%

“…Instrumental variables must correlate with the second-stage-dependent variable (foreign divestment) only via their correlation with the first-stage variable (internationalization speed) (Bascle, 2008). Prior research suggests that both firms' geographic scope and their (overall) market share are correlated with internationalization speed (Casillas & Moreno-Menéndez, 2014;Chang & Rhee, 2011;Mohr & Batsakis, 2014), whereas there are no a priori reasons to expect a correlation of these instruments with foreign divestment. In addition, a correlation analysis reveals that both geographic scope and market share significantly correlate with internationalization speed (r = 0.31 and r = 0.30, respectively; p \ 0.05) but not with foreign divestment (r = 0.07 and r = 0.02, respectively; n.s.…”

Section: Planetretailmentioning

confidence: 99%

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Explaining the effect of rapid internationalization on horizontal foreign divestment in the retail sector: An extended Penrosean perspective

2018

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We adopt a Penrosean perspective to study the effect of rapid international expansion on the subsequent divestment of international operations. We draw on regional strategy theory and differentiate Penrosean managerial resources by their geographical fungibility to argue that the effect of rapid international expansion on the divestment of international operations varies with the regional patterns of firms' international expansion and international experience. We test our hypotheses using two-stage least squares (2SLS) estimation on data that capture the international expansion and divestment of retailers over the period [2003][2004][2005][2006][2007][2008][2009][2010][2011][2012]. Journal of International Business Studies (2018).

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Section: Methodsmentioning

confidence: 99%

Section: Planetretailmentioning

confidence: 99%

Explaining the effect of rapid internationalization on horizontal foreign divestment in the retail sector: An extended Penrosean perspective

2018

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“…This characteristic suggests that exports significantly affect overall corporate performance. Second, the literature on the relationship between export expansion speed and performance mainly focuses on corporate-level rather than project-level performance (Chang & Rhee, 2011;Li et al, 2012;Mudambi & Zahra, 2007;Vermeulen & Barkema, 2002). Such a corporate-level construct and measure may fully capture the fundamental effect of rapid export expansion on firm routines, culture, survival, and performance.…”

Section: Variablesmentioning

confidence: 99%

“…For example, the strategies of firm export expansion are formulated by managers with consideration of internal resources and the external environment. At the same time, these internal and external factors directly affect the performance and survival of business operations (Chang & Rhee, 2011;Mudambi & Zahra, 2007). Simply running an ordinary least squares regression between endogenous variables (e.g., export expansion) and dependent variables (e.g., performance) leads to inconsistent coefficients (Wooldridge, 2002a, p. 83).…”

mentioning

confidence: 99%

Rapid expansion of international new ventures across institutional distance

2018

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Rapid export expansion into institutionally distant locations has become more possible in the era of digital economy. Will such rapid expansion bring desirable outcome to firms? In a context of international new ventures (INVs) from emerging markets, we reconceptualize export expansion speed as the pace of exporting across institutional distance over a certain period of time. We then examine the relationship between rapid export expansion across institutional distance and overall firm performance. We incorporate directionality into export expansion and hypothesize the relationship to be positive when INVs export upwardly to more open countries, yet the relationship to be negative when INVs export downwardly to less open countries. We also hypothesize that the degree of market liberalization in subnational regions of origin of the INVs moderates the above speed-performance relationships. Instrumental variable models based on data of Chinese indigenous INVs during 2000-2009 support these hypotheses. This study both zooms in and zooms out the analytical lens along the location-related institutional axis, examines the joint effect of institutions involved in supranational directions and subnational origins on firm performance, and advances institutional theory.

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“…1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 (Barney, 1991;Oliver, 1997;Goldstein, 2007;Chang and Rhee, 2011;Cuervo-Cazurra and Genc, 2011). At the same time, RBV emphasises the strategic importance of the selection and deployment of resources in a dynamic and evolutionary way compared to traditional FDI theories which see Ownership advantage as rather the "static constraints" of the firm (Oliver, 1997;Moon and Roehl, 2001, p.198).…”

Section: Distinctiveness Of Em Ofdis and Resource-based View (Rbv)mentioning

confidence: 99%

Determinants of Greenfield emerging market outward FDI into the UK

Godwin

Cook

2018

IJOEM

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1 AbstractPurpose: The purpose of this paper is to examine the determinants of Greenfield Emerging Market (EM) Outward Foreign Direct Investment (OFDI) into the UK, a Developed Market (DM) host. Despite the increasing significance of EM OFDI, this particular theme of EM OFDI to a DM host has received relatively little attention from researchers. This paper seeks to address this shortfall.Design/methodology/approach: Considering the distinctiveness of EM OFDI in its firmspecific characteristics, given circumstances and motivations, this paper applies adapted 'Resource-based view (RBV)' framework and institutional theory to build a theoretical framework. A range of hypotheses regarding 'strategic-asset seeking', 'market-seeking' and 'institution-seeking' motivations of EM OFDI, which reflect both 'pull factors' (advantages in hosts) and 'push factors' (disadvantages at home), were then developed. Using panel data for the years 2003-2012, the research questions were analysed using a sample of the then most important emerging market source countries which had undertaken Greenfield FDI into the UK.Findings: The analysis results supported the hypotheses that strategic-asset seeking and institution-seeking motivations were important in determining EM OFDI to the UK, with the coefficients of relevant variables showing statistical significance and expected sign (i.e. positive). However, the hypothesis on market-seeking motivation of EM OFDI cannot be supported as the coefficient of the relevant variable, whilst showing the expected sign, had a statistically insignificant coefficient. Amongst the three control variables, the source countries' exports and imports as a percentage of GDP was statistically significant and had the correct sign whilst, the UK's share of intra-EU trade, whilst statistically significant, had the opposite sign to that expected. The third control variable, the exchange rate was not statistically significant, though it had the correct sign.Originality/value: This paper provides an adjusted theoretical framework for the analysis of EM OFDI to DM with a novel application of institutional theory and RBV. It also qualifies and extends existing works on EM OFDI by including a wider range of EM source countries and DM hosts with empirical analysis results as well as theoretical suggestions. In addition, the paper offers up a range of policy implications for DM hosts.

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Rapid FDI expansion and firm performance

Cited by 223 publications

References 72 publications

Explaining the effect of rapid internationalization on horizontal foreign divestment in the retail sector: An extended Penrosean perspective

Explaining the effect of rapid internationalization on horizontal foreign divestment in the retail sector: An extended Penrosean perspective

Rapid expansion of international new ventures across institutional distance

Determinants of Greenfield emerging market outward FDI into the UK

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