Political risk, cultural distance, and outward foreign direct investment: Empirical evidence from large Chinese firms

• Published in: Asia Pacific journal of management Vol. 29; no. 4; pp. 1089 - 1104
• Main Authors: Quer, Diego, Claver, Enrique, Rienda, Laura
• Format: Journal Article
• Language: English
• Published: Boston Springer US 01.12.2012; Springer Nature B.V
• Subjects: 2002-2009; 21st century; Analysis; Auslandsinvestition; Business and Management; Chinesisch; Economic growth; Emerging markets; Exports; Foreign investment; Globalization; Host country; Hypotheses; Industrialized nations; International business; Investitionsrisiko; Kulturelle Identität; Management; Multinational corporations; Multinationales Unternehmen; Organization theory; Political risk; Politics; Politische Kultur; Studies; Transition economies; Welt; China; Political risk; Outward FDI; Cultural distance; Chinese multinationals
• ISSN: 0217-4561; 1572-9958
• DOI: 10.1007/s10490-011-9247-7

The internationalization of Chinese enterprises is a subject that is receiving increasing attention in international business research. This paper analyzes the influence of political risk and cultural distance on the location patterns of large Chinese companies. Our results show some characteristics that differ from the conventional wisdom. A high political risk in the host country does not discourage Chinese multinationals. However, from a more conventional point of view, the presence of overseas Chinese in the host country is positively associated with Chinese outward foreign direct investment (FDI). In addition, firm size and the volume of Chinese exports to the host country have a positive influence.