Insider Control and the Location Decision Evidence from Firms Investing in an Emerging Market　外文原文.pdfVIP

Manag Int Rev (2009) 49:433–454 DOI 10.1007/s11575-009-0003-x Resea R ch aRticle Insider Control and the FDI Location Decision Evidence from Firms Investing in an Emerging Market Roger Strange · Igor Filatotchev · Yung-chih Lien · Jenifer Piesse Abstract: 0 This paper examines the FDI location strategies of firms from one of the Asian NIEs (Tai- wan) in a rapidly emerging market (China). Although there is a substantial literature on FDI location choice, most studies model the choice as a function of a range of location-specific attributes such as local market size, labour costs etc. Few studies consider the impact of firm- specific characteristics, other than potential country-of-origin effects. 0 Yet locations, and especially those in emerging markets where institutions are weak and capi- tal markets are immature, also differ in terms of their risk. Different shareholder constituen- cies within the parent company will typically have different preferences with regard to risk, and are therefore likely to favour some locations over others. 0 We find that the ownership structure of the parent company matters with regard to its FDI location decision and, in particular, that both family and non-family insider shareholders exert influence over the choice of location. 0 Furthermore we show that firms’ location and entry mode choices are inter-related, and es- tablish that the extent of their resource commitments in their foreign affiliates leads parent companies to favour locations where the perceived risks are lower. 0 Finally we show that the efficacy of firms’ external relational linkages varies according to the strength of the cultural and historic ties between the location of the foreign affiliate and the home country. Keywords: FDI location · Entry mode · Emerging markets · Ownership structure · insider control Received: 28.12.2007 / Revised: 10.11.2