TY - JOUR
T1 - Outward FDI and profitability of emerging economy firms: Diversifying from home resource dependence in early stage internationalization
AU - Cui, Lin
AU - Xu, Ying
PY - 2019
Y1 - 2019
N2 - We investigate the effect of conducting FDI on the profitability of emerging economy firms in early stage internationalization. We argue that FDI can be an effective strategy to alleviate liabilities of emergingness, thus generating positive performance outcomes. We hypothesize that, contingent on factors altering motivation and capability of firms to diversify from home resource dependence, emerging economy firms can benefit from conducting FDI, resulting in a greater rate of intangible assets growth and enhanced profitability. Using panel data of Chinese firms prior to the global financial crisis, and through combining matching techniques with difference-in-difference analysis, we find empirical support for our arguments.
AB - We investigate the effect of conducting FDI on the profitability of emerging economy firms in early stage internationalization. We argue that FDI can be an effective strategy to alleviate liabilities of emergingness, thus generating positive performance outcomes. We hypothesize that, contingent on factors altering motivation and capability of firms to diversify from home resource dependence, emerging economy firms can benefit from conducting FDI, resulting in a greater rate of intangible assets growth and enhanced profitability. Using panel data of Chinese firms prior to the global financial crisis, and through combining matching techniques with difference-in-difference analysis, we find empirical support for our arguments.
U2 - 10.1016/j.jwb.2019.04.002
DO - 10.1016/j.jwb.2019.04.002
M3 - Article
SN - 1090-9516
VL - 54
SP - 372
EP - 386
JO - Journal of World Business
JF - Journal of World Business
IS - 4
ER -