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Knowledge Seeking and Outward FDI of Emerging Market Firms: The Moderating Effect of Inward FDI
Author(s) -
Li Jing,
Li Yong,
Shapiro Daniel
Publication year - 2012
Publication title -
global strategy journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.814
H-Index - 24
eISSN - 2042-5805
pISSN - 2042-5791
DOI - 10.1111/j.2042-5805.2012.01042.x
Subject(s) - multinational corporation , foreign direct investment , business , emerging markets , panel data , industrial organization , investment (military) , international trade , economics , finance , econometrics , macroeconomics , politics , political science , law
This study examines whether a host country's industry‐specific technology advantage increases the propensity of emerging market multinational enterprises ( EMNEs ) to invest in the host country. The study further explores whether inward FDI in EMNEs ' home markets, by generating knowledge spillovers in the relevant industries, decreases EMNEs ' propensity to invest overseas for knowledge seeking. We test our arguments using a longitudinal data set of the overseas investment activities of C hinese manufacturing firms. We find support for our hypotheses after controlling for other important outward FDI motives. We discuss the implications of our results for research and practice.