Outward FDI, location choices and innovation performance of emerging market enterprises

Panagiotis Piperopoulos, Jie Wu, Chengqi Wang*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

51 Citations (Scopus)

Abstract

Although prior research conceptualizes how knowledge-seeking motivates the internationalization of emerging-market enterprises (EMEs), whether outward foreign direct investment (OFDI) indeed leads to enhanced innovation performance has received limited attention. We address this subject by conceptualizing how Chinese EMEs’ OFDI enhances their subsidiaries’ organizational learning and innovation performance and whether geographic location choices influence this relationship. Our panel data analysis of Chinese EMEs shows that OFDI has a positive effect on innovation performance of Chinese EMEs’ subsidiaries and that this effect is stronger when the OFDI is directed towards developed rather than emerging countries. These findings advance the notion that EMEs can use OFDI as a strategy to globalize R&D and enhance their innovation performance and demonstrate that certain established assumptions regarding organizational learning are not valid for EMEs.

Original languageEnglish
Pages (from-to)232-240
Number of pages9
JournalResearch Policy
Volume47
Issue number1
Early online date11 Nov 2017
DOIs
Publication statusPublished - 28 Feb 2018

Keywords

  • China
  • Emerging market enterprises
  • Geographic location
  • Innovation
  • Organizational learning
  • Outward foreign direct investment
  • Subsidiaries

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