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Timing of Investment and International Expansion Performance in China

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  • Yadong Luo

    (University of Hawaii at Manoa)

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    Abstract

    This study examines the multivariate and univariate performance effects of timing of FDI in an emerging economy at the business unit level. A longitudinal analysis of industry-wide, firm-specific data on FDI timing and foreign venture performance in China reveals that timing has a significant influence on overall, as well as on individual, aspects of venture performance. It is observed that early entrants outperform late movers in terms of local market expansion and asset turnover, whereas late movers are superior to early entrants with regard to risk reduction and accounting return during the initial period of international expansion. Factor analysis confirms that the importance of timing in affecting FDI decisions is as significant as that of internalization, ownership, or location factors.© 1998 JIBS. Journal of International Business Studies (1998) 29, 391–407

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    Bibliographic Info

    Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

    Volume (Year): 29 (1998)
    Issue (Month): 2 (June)
    Pages: 391-407

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    Handle: RePEc:pal:jintbs:v:29:y:1998:i:2:p:391-407

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    Cited by:
    1. Fryxell, Gerald E. & Butler, John & Choi, Amanda, 2004. "Successful localization programs in China: an important element in strategy implementation," Journal of World Business, Elsevier, vol. 39(3), pages 268-282, August.
    2. Luo, Yadong & Tan, J. Justin, 1998. "A comparison of multinational and domestic firms in an emerging market: A strategic choice perspective," Journal of International Management, Elsevier, vol. 4(1), pages 21-40, July.
    3. Fisch, Jan Hendrik, 2008. "Internalization and internationalization under competing real options," Journal of International Management, Elsevier, vol. 14(2), pages 108-123, June.
    4. Carlsson, Johan & Nordegren, Axel & Sjöholm, Fredrik, 2005. "International experience and the performance of Scandinavian firms in China," International Business Review, Elsevier, vol. 14(1), pages 21-40, February.
    5. Demirbag, Mehmet & Glaister, Keith W. & Tatoglu, Ekrem, 2007. "Institutional and transaction cost influences on MNEs' ownership strategies of their affiliates: Evidence from an emerging market," Journal of World Business, Elsevier, vol. 42(4), pages 418-434, December.
    6. Jiang, Ruihua Joy & Beamish, Paul W. & Makino, Shige, 2014. "Time compression diseconomies in foreign expansion," Journal of World Business, Elsevier, vol. 49(1), pages 114-121.
    7. Claudio Giachetti, 2013. "Competitive Aggressiveness and Performance of Developed Country-Based Firms in the Chinese Emerging Economy: The Moderating Effect of Institutional Voids and Entry Mode Degree of Control," Working Papers 1, Department of Management, Università Ca' Foscari Venezia.
    8. Jing Yang & Frank Tipton & Jiatao Li, 2011. "A review of foreign business management in China," Asia Pacific Journal of Management, Springer, vol. 28(3), pages 627-659, September.
    9. Lu, Yadong, 1998. "Joint venture success in China: How should we select a good partner?," Journal of World Business, Elsevier, vol. 33(2), pages 145-166, July.
    10. Lu, Jane W., 2003. "The evolving contributions in international strategic management research," Journal of International Management, Elsevier, vol. 9(2), pages 193-213.
    11. Piotr Trapczynski, 2013. "Determinants of Foreign Direct Investment Performance – a Critical Literature Review," Oeconomia Copernicana, Polskie Towarzystwo Ekonomiczne Oddzial w Toruniu, Wydzial Nauk Ekonomicznych i Zarzadzania UMK, vol. 2, pages 117-132.
    12. Fisch, Jan Hendrik, 2006. "Internalization and internationalization under copeting real options," Discussion Paper Series 1: Economic Studies 2006,15, Deutsche Bundesbank, Research Centre.
    13. Kashlak, Roger, 1998. "Establishing financial targets for joint ventures in emerging countries: A conceptual model," Journal of International Management, Elsevier, vol. 4(3), pages 241-258, November.
    14. Luo, Yadong, 2001. "Equity sharing in international joint ventures: an empirical analysis of strategic and environmental determinants," Journal of International Management, Elsevier, vol. 7(1), pages 31-58.
    15. Luo, Yadong, 2000. "Dynamic capabilities in international expansion," Journal of World Business, Elsevier, vol. 35(4), pages 355-378, January.

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