Multinationality and performance effects: an integrated theory of new patterns of multinationality and home political influence
ISSN: 1750-614X
Article publication date: 5 October 2020
Issue publication date: 15 March 2021
Abstract
Purpose
This paper aims to develop an integrated perspective on the relationship between multinationality and performance in the outward foreign direct investment (OFDI) of Chinese firms. The study not only represents contrasting OFDI patterns – namely, born global-natured multiple synchronous foreign investments versus conventional internationalization process (IP)-natured steady increasing foreign investments – but also contributes to understanding the extent to which explanations of home political influence need to be rooted within the general theory of multinationality.
Design/methodology/approach
By testing a comprehensive panel observation of 8,635 OFDI projects from 1991-2016 in China, this study found that multinationality with the new pattern of multiple synchronous OFDIs has a superior performance effect compared with the conventional pattern of steady increasing OFDIs.
Findings
This study also finds a positive relationship between multinationality (international diversification and home political influence) and the performance effect with the new pattern of multiple synchronous OFDIs, as well as a partial positive relationship between multinationality and the performance effect with the conventional pattern of steady increasing OFDIs.
Research limitations/implications
The study extends the understanding of the performance effects of Chinese multinational enterprises, which may benefit more from the new pattern of multiple synchronous OFDIs than from the conventional pattern of steady increasing OFDIs when the home-country institution is strongly positioned.
Originality/value
This paper concludes that multinationality needs an integrated framework that accounts for the new pattern of OFDI and the influence of diversification and home politics, particularly for the emerging country, China.
Keywords
Acknowledgements
The authors would like to thank the editors and the reviewers for their constructive comments and suggestions regarding the earlier drafts of this study. The research and related studies are supported by the Guangdong Youth Innovation Talents Project (grant number: 201912023QX), the Program for Research Development of Beijing Normal University, Zhuhai, China and the Ministry of Science and Technology from Taiwan..
Citation
Yen, I.-F. and Lin, H.-M. (2021), "Multinationality and performance effects: an integrated theory of new patterns of multinationality and home political influence", Chinese Management Studies, Vol. 15 No. 1, pp. 155-181. https://doi.org/10.1108/CMS-12-2019-0441
Publisher
:Emerald Publishing Limited
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