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Developed economy investment promotion agencies and emerging market foreign direct investment: The case of Chinese FDI in Canada

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  • Anderson, John
  • Sutherland, Dylan

Abstract

In light of the perceived benefits derived from inward FDI, many developed economies have systematically established investment promotion agencies (IPAs) to attract foreign investment. While IPAs in the past have been created by a wide variety of countries and regions, their target economies have overwhelmingly been in developed markets. The rise of emerging market MNEs is significantly changing this picture. We analyse the impact of IPAs on attracting emerging market FDI to developed economies by looking at the example of Chinese FDI into Canada. We find strong statistical evidence that the presence of Canadian provincial-level IPAs located in China increases the likelihood of Chinese firms locating in that Canadian province. Focusing on the role of IPAs in lowering liabilities of foreignness, we explore how differences in host and home country contexts may explain our findings.

Suggested Citation

  • Anderson, John & Sutherland, Dylan, 2015. "Developed economy investment promotion agencies and emerging market foreign direct investment: The case of Chinese FDI in Canada," Journal of World Business, Elsevier, vol. 50(4), pages 815-825.
  • Handle: RePEc:eee:worbus:v:50:y:2015:i:4:p:815-825
    DOI: 10.1016/j.jwb.2015.04.005
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    Cited by:

    1. Xie, En & Reddy, K.S. & Liang, Jie, 2017. "Country-specific determinants of cross-border mergers and acquisitions: A comprehensive review and future research directions," Journal of World Business, Elsevier, vol. 52(2), pages 127-183.
    2. Chensheng Xu & Feng Yao & Fan Zhang, 2015. "An Investigation of Confucius Institute’s Effects on China’s OFDI via Cultural Difference and Institutional Quality," Working Papers 15-45, Department of Economics, West Virginia University.
    3. Zhang, Yanlong & Zhao, Wei & Ge, Jianhua, 2016. "Institutional duality and political strategies of foreign-invested firms in an emerging economy," Journal of World Business, Elsevier, vol. 51(3), pages 451-462.

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