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Ethnic ties, location choice, and firm performance in foreign direct investment: A study of Taiwanese business groups FDI in China

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  • Jean, Ruey-Jer Bryan
  • Tan, Danchi
  • Sinkovics, Rudolf R.

Abstract

This paper examines ethnic ties and their impact on FDI location choice and firm performance. Drawing on social network theory and using data from 88 Taiwanese business groups, the study tests the impact of ethnic ties on firm FDI location choice and performance outcomes in China. Results show that ethnic ties of top managers matter in facilitating firm FDI location choice. In contrast to our expectations however, ethnic ties do not help to improve firm performance in China. Implications of these results are discussed in view of existing literature and future research opportunities are delineated.

Suggested Citation

  • Jean, Ruey-Jer Bryan & Tan, Danchi & Sinkovics, Rudolf R., 2011. "Ethnic ties, location choice, and firm performance in foreign direct investment: A study of Taiwanese business groups FDI in China," International Business Review, Elsevier, vol. 20(6), pages 627-635.
  • Handle: RePEc:eee:iburev:v:20:y:2011:i:6:p:627-635
    DOI: 10.1016/j.ibusrev.2011.02.012
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    References listed on IDEAS

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    Cited by:

    1. Lien, Yung-Chih & Filatotchev, Igor, 2015. "Ownership characteristics as determinants of FDI location decisions in emerging economies," Journal of World Business, Elsevier, vol. 50(4), pages 637-650.
    2. Hu, Helen Wei & Cui, Lin, 2014. "Outward foreign direct investment of publicly listed firms from China: A corporate governance perspective," International Business Review, Elsevier, vol. 23(4), pages 750-760.
    3. Leonidou, Constantinos N. & Leonidou, Leonidas C. & Coudounaris, Dafnis N. & Hultman, Magnus, 2013. "Value differences as determinants of importers’ perceptions of exporters’ unethical behavior: The impact on relationship quality and performance," International Business Review, Elsevier, vol. 22(1), pages 156-173.
    4. repec:eee:worbus:v:53:y:2018:i:2:p:134-150 is not listed on IDEAS
    5. Lau, Chi Keung Marco & Suvankulov, Farrukh & Karabag, Solmaz Filiz, 2012. "Determinants of firm competitiveness: case of the Turkish textile and apparel industry," MPRA Paper 46974, University Library of Munich, Germany.
    6. repec:kap:jinten:v:15:y:2017:i:3:d:10.1007_s10843-017-0209-0 is not listed on IDEAS
    7. repec:spr:epolin:v:44:y:2017:i:2:d:10.1007_s40812-016-0062-5 is not listed on IDEAS
    8. repec:eee:worbus:v:53:y:2018:i:2:p:93-103 is not listed on IDEAS
    9. repec:eee:jbrese:v:88:y:2018:i:c:p:20-27 is not listed on IDEAS
    10. Gao, Lan & Liu, Xiaohui & Zou, Huan, 2013. "The role of human mobility in promoting Chinese outward FDI: A neglected factor?," International Business Review, Elsevier, vol. 22(2), pages 437-449.
    11. repec:eee:iburev:v:27:y:2018:i:1:p:125-138 is not listed on IDEAS
    12. Piotr Trapczynski, 2013. "Determinants Of Foreign Direct Investment Performance – A Critical Literature Review," Oeconomia Copernicana, Institute of Economic Research, vol. 4(2), pages 117-132, June.
    13. Ying-Yu Chen & Yi-Long Jaw, 2014. "How do business groups’ small world networks effect diversification, innovation, and internationalization?," Asia Pacific Journal of Management, Springer, vol. 31(4), pages 1019-1044, December.
    14. repec:eee:advacc:v:31:y:2015:i:2:p:228-238 is not listed on IDEAS

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    Keywords

    China; Ethnic; FDI; Market entry; Social ties;

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