The impact of home business network attributes on Chinese outward foreign direct investment

•Host country network has been found important to a firm’s internationalization. However, home country network matters as well.•The impact of home country business network on outward FDI is contingent upon both structural and relational network embeddedness.•A firm’s central position in the home cou...

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Veröffentlicht in:International business review 2021-08, Vol.30 (4), p.101779, Article 101779
Hauptverfasser: Du, Jian, Xu, Yue, Voss, Hinrich, Wang, Song
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Sprache:eng
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Zusammenfassung:•Host country network has been found important to a firm’s internationalization. However, home country network matters as well.•The impact of home country business network on outward FDI is contingent upon both structural and relational network embeddedness.•A firm’s central position in the home country business network has a positive association with its outward FDI, in contrast to a brokerage network position.•A firm with a central network position and with strong ties to foreign invested enterprises is more likely to engage in outward FDI.•A firm with strong ties with domestic firms tend to play a negative role. Researchers who take a network perspective argue that insidership in foreign market networks is a necessary condition for internationalization. In this study, we argue that insidership in home market networks also matters. The effect of home network insidership on outward foreign direct investment (OFDI) depends on both individual and joint effects of structural and relational network attributes. Our study based on a survey of 194 Chinese firms shows that firms in a central network position are more likely to engage in OFDI than those in a brokerage position. Furthermore, we find the interaction between firms’ centrality and their connections to foreign-invested enterprises to be significantly and positively associated with OFDI, whereas a significantly negative effect is evidenced when a firm is connected more to domestic firms.
ISSN:0969-5931
1873-6149
DOI:10.1016/j.ibusrev.2020.101779