Host and Home Country Determinants of Foreign Entry Modes: Evidence from the Chinese Natural Resource Industries

Jing Su, Ping Lv, Ilan Alon, Peter Gammeltoft

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

The purpose of this paper is to examine the home and host country co-determinants of entry modes among Chinese natural resource-based multinational enterprises. We propose that home country factors have an indirect effect on entry modes while the host country factors have a direct effect. Our database consists of investment data on 415 entry mode decisions by 335 Chinese firms in natural resource sectors investing in 75 destination countries over the period 2004 to 2015. By using the hierarchical linear model, the disparate roles of the host country and the home country can be examined. Our findings suggest that firms are more likely to pursue acquisition in a host country with a rule-based governance environment. However, this relationship becomes weaker when the resource endowments of the home province increase (negative interaction). Firms are also more likely to pursue acquisition in a host country scarce in natural resources. This relationship becomes stronger when the quality of the business environment of the home province increases (positive interaction). This article contributes to improving the framework for analyzing simultaneous host country and home country determinants of entry mode choice and deepens the understanding of the mechanisms through which country level factors assert their influence.
Original languageEnglish
Publication date2019
Number of pages43
Publication statusPublished - 2019
EventAIB 2019 Annual Meeting: International Business in an Unsettling Political and Economic Environment - Copenhagen Business School, Frederiksberg, Denmark
Duration: 24 Jun 201927 Jun 2019
https://aib.msu.edu/events/2019/

Conference

ConferenceAIB 2019 Annual Meeting
LocationCopenhagen Business School
CountryDenmark
CityFrederiksberg
Period24/06/201927/06/2019
Internet address

Bibliographical note

CBS Library does not have access to the material

Keywords

  • Entry modes
  • Foreign market entry
  • Home country
  • Host country
  • Natural resource industries
  • Hierarchical linear modeling
  • Institutional theory

Cite this

Su, J., Lv, P., Alon, I., & Gammeltoft, P. (2019). Host and Home Country Determinants of Foreign Entry Modes: Evidence from the Chinese Natural Resource Industries. Paper presented at AIB 2019 Annual Meeting, Frederiksberg, Denmark.
Su, Jing ; Lv, Ping ; Alon, Ilan ; Gammeltoft, Peter. / Host and Home Country Determinants of Foreign Entry Modes : Evidence from the Chinese Natural Resource Industries. Paper presented at AIB 2019 Annual Meeting, Frederiksberg, Denmark.43 p.
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Su, J, Lv, P, Alon, I & Gammeltoft, P 2019, 'Host and Home Country Determinants of Foreign Entry Modes: Evidence from the Chinese Natural Resource Industries' Paper presented at, Frederiksberg, Denmark, 24/06/2019 - 27/06/2019, .

Host and Home Country Determinants of Foreign Entry Modes : Evidence from the Chinese Natural Resource Industries. / Su, Jing; Lv, Ping; Alon, Ilan; Gammeltoft, Peter.

2019. Paper presented at AIB 2019 Annual Meeting, Frederiksberg, Denmark.

Research output: Contribution to conferencePaperResearchpeer-review

TY - CONF

T1 - Host and Home Country Determinants of Foreign Entry Modes

T2 - Evidence from the Chinese Natural Resource Industries

AU - Su, Jing

AU - Lv, Ping

AU - Alon, Ilan

AU - Gammeltoft, Peter

N1 - CBS Library does not have access to the material

PY - 2019

Y1 - 2019

N2 - The purpose of this paper is to examine the home and host country co-determinants of entry modes among Chinese natural resource-based multinational enterprises. We propose that home country factors have an indirect effect on entry modes while the host country factors have a direct effect. Our database consists of investment data on 415 entry mode decisions by 335 Chinese firms in natural resource sectors investing in 75 destination countries over the period 2004 to 2015. By using the hierarchical linear model, the disparate roles of the host country and the home country can be examined. Our findings suggest that firms are more likely to pursue acquisition in a host country with a rule-based governance environment. However, this relationship becomes weaker when the resource endowments of the home province increase (negative interaction). Firms are also more likely to pursue acquisition in a host country scarce in natural resources. This relationship becomes stronger when the quality of the business environment of the home province increases (positive interaction). This article contributes to improving the framework for analyzing simultaneous host country and home country determinants of entry mode choice and deepens the understanding of the mechanisms through which country level factors assert their influence.

AB - The purpose of this paper is to examine the home and host country co-determinants of entry modes among Chinese natural resource-based multinational enterprises. We propose that home country factors have an indirect effect on entry modes while the host country factors have a direct effect. Our database consists of investment data on 415 entry mode decisions by 335 Chinese firms in natural resource sectors investing in 75 destination countries over the period 2004 to 2015. By using the hierarchical linear model, the disparate roles of the host country and the home country can be examined. Our findings suggest that firms are more likely to pursue acquisition in a host country with a rule-based governance environment. However, this relationship becomes weaker when the resource endowments of the home province increase (negative interaction). Firms are also more likely to pursue acquisition in a host country scarce in natural resources. This relationship becomes stronger when the quality of the business environment of the home province increases (positive interaction). This article contributes to improving the framework for analyzing simultaneous host country and home country determinants of entry mode choice and deepens the understanding of the mechanisms through which country level factors assert their influence.

KW - Entry modes

KW - Foreign market entry

KW - Home country

KW - Host country

KW - Natural resource industries

KW - Hierarchical linear modeling

KW - Institutional theory

KW - Entry modes

KW - Foreign market entry

KW - Home country

KW - Host country

KW - Natural resource industries

KW - Hierarchical linear modeling

KW - Institutional theory

M3 - Paper

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Su J, Lv P, Alon I, Gammeltoft P. Host and Home Country Determinants of Foreign Entry Modes: Evidence from the Chinese Natural Resource Industries. 2019. Paper presented at AIB 2019 Annual Meeting, Frederiksberg, Denmark.