Outward foreign direct investment from emerging economies: escaping home country regulative voids?

Carmen Stoian, Alexander Mohr

Publikation: Wissenschaftliche FachzeitschriftOriginalbeitrag in FachzeitschriftBegutachtung


The internationalisation of multinationals from emerging economies raises the question of whether mainstream theory can explain this phenomenon. We combine the explanations of outward foreign direct investment (OFDI) provided by the institution-based view and the investment development path (IDP) and suggest that the combined use of these explanations contributes to the reconciliation of the mainstream and emerging views of internationalisation. We argue that although OFDI is undertaken by firms to overcome the competitive disadvantages resulting from home country regulative voids, escapist investment is facilitated if these firms possess certain competitive advantages that help them overcome the liability of foreignness when expanding abroad. We thus expect the impact of regulative voids on OFDI to vary with the level of local firms’ ownership advantages. Our analysis of OFDI flows from 29 emerging economies over 17 years (1995–2011) provides support for the direct effects of two types of regulative voids and for the three suggested moderating effects of firms’ competitive advantages.
Seiten (von - bis)1124 - 1135
FachzeitschriftInternational Business Review
PublikationsstatusVeröffentlicht - 2016