China’s Outward Foreign Direct Investment and Home-country Policies

Abstract

This study investigates how industry- and ownership-specific policies influence outward foreign direct investment (OFDI) of Chinese multinational enterprises (MNEs). Building upon new organizational institutionalism, we examine the coercive, normative, and mimetic institutional pressures on MNEs. We test our hypotheses using monthly data between 2008 and 2015. The empirical analysis reveals that while normative policies influence particularly private-owned enterprises (POEs) – the Belt and Road Initiative (BRI) and the Made in China 2025 Strategy – the relationship between (central) state-owned enterprises and home-country policies is less clear. We also find that Chinese OFDI is influenced by the internationalization behavior of their home-country peer group.