*When: April 26, Tue, 11:45 AM - 12:45 PM
*Where: CO 317
Title: Location Strategy and Firm Value Creation: The case of Chinese MNEs
Abstract:
The
trend of Chinese outward foreign direct investment (OFDI) seems
unstoppable. There has been a surge of overseas investment from China
both to developing and developed countries. However, we have limited
understanding of the impact the internationalization of these firms
have on their value creation. In this paper, we draw on organizational
learning theory to explore the impact of different types of FDI (i.e,
exploitative and explorative FDI) and MNEs’ FDI location choice on firm
value creation. Using event study methodology, we find that FDI types
affect value creation for Chinese MNEs. In addition, we empirically
demonstrate that positive value is created when Chinese MNEs aligned
their location choice with international expansion strategy. We
contribute to the growing body of literature on internationalization of
Chinese firms by empirically verifying whether international expansion
creates value for the firm and whether the types of FDI and location
strategies have impact on firm value creation. We also contribute to
the FDI theory building by extending the traditional FDI theories to
the context of emerging market MNEs, namely Chinese MNEs.
