Determinants of Technology Investment from China into other Emerging Markets: A Comparative Analysis

Аннотация
INTRODUCTION 8
CHAPTER 1. THEORETICAL FOUNDATIONS OF FIRM’s INTERNATIONALIZATION . 14
1.1. Conventional Theories 15
1.1.1 The Uppsala model of internationalization 15
1.1.2 Eclectic paradigm Theory 16
1.2 Theories related to the emerging-market 17
1.2.1 The Resource-Based View 18
1.2.2 Institutional theory 19
1.3 Conclusions and the theoretical approach used in the dissertation 21
CHAPTER 2. APPROACHES TO INTENATIONALIZATION OF EMES: THEORETICAL
MODEL 23
1.4 Context background of the study 23
1.5 Theoretical model and hypotheses of the study 28
1.5.1 Nature and particularities Emerging Markets Multinationals internationalization ...28
1.5.2 Investing in other emerging economies versus investing in developed economies ..29
1.5.3 Technology-driven foreign direct investment from emerging markets
multinationals 29
1.5.4 Hypotheses development 30
1.6 Conclusion Chapter 2 35
CHAPTER 3. EMPIRICAL ANALYSIS OF THE DETERMINANTS OF TECHNOLOGY
INVESTMENTS FROM CHINA INTO OTHER EMERGING ECONOMIES: A
COMPARATIVE ANALYSIS 36
1.7 Strategy and design of the empirical research 37
1.7.1 Data collection and sample description 37
1.7.2 Operationalization of the variables 40
1.8 Model Specification 45
1.8.1 Descriptive statistics and diagnostics analysis 46
1.8.2 Panel data modeling 49
1.8.3 Model Selection 51
1.8.4 Hausman and Mundlak test: Testing for endogeneity 52
1.8.5 The Breusch-Pagan Lagrange multiplier (LM) test: Testing random effects 55
1.8.6 F-test: testing a fixed group effect 56
1.8.7 OLS tests for functional misspecification 57
1.9 Empirical analysis 57
1.9.1 Regression analysis results 57
1.9.2 Hypothesis testing and results discussion 60
1.10 Conclusion of the empirical analysis 63
CONCLUSION 64
1.11 Theoretical contributions of the study 64
1.12 Practical contributions of the study 67
1.13 Study limitations and further research 68
LIST OF ABBREVIATION AND SYMBOLS 69
REFERENCES 70
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Relevance of the research topic is determined by the need for scientific understanding of the specifics of the emerging markets multinationals carrying out foreign investments into other emerging economies. The issue of effective ways for governments to mobilize resources and adopt regulations to attract inwards and foster outward foreign investments is of particular relevance for the national economy competitiveness.
The number of Foreign Direct Investment (FDI) from multinational from emerging economies has risen significantly since 2005 and this remarkable growth has attracted attention of academics and researchers to foreign direct investment during the last decade (World Bank Group, 2021). This shift in the origin of foreign direct investment has occurred in parallel with a rise in the proportion of technology-driven foreign direct investment (FDI) from emerging countries particularly aimed at augmenting their technological capabilities through mergers, acquisitions, and greenfield investments abroad. Earlier, Chinese foreign direct investment was concentrated in the energy and mining sectors; however, China’s outward foreign direct investment is experiencing a shift from targeting natural resources assets to high technology and consumer- oriented targets (Ernst and Young 2019)
China stands out among all the other emerging economies, as being the fastest growing economy for the past two decades (Paul, Benito 2018) and for the rapid growth of its foreign direct investment that contributed to its position as a global player (Buckley 2019).
The Chinese firms are truly becoming key players in the industry worldwide. Managers, especially for incumbent firms, need to understand the characteristic and dynamics of emerging markets firms when they enter in a new market. At a policy level, since the emerging market firms are internationalizing worldwide, host-countries need to implement measures to diminish economic barriers in order to foster resources, capital, knowledge and investment flows, while address at the same time the negative effects of the potential managerial and planning deficits that some of Emerging markets multinationals may entails
Studies have suggested that emerging markets multinationals have different investment motives for foreign direct investment shaped by whether they invest in other emerging economies or in developed economies (references). Thus, the identification and evaluation of the drivers of technology investment from emerging markets multinationals into other emerging economies, and how location-bound country-specific factors influence the location choice of these technology- driven investments, is on high relevance with the aim to attract high value foreign investments and it predetermines the theoretical and practical significance of research in this field.
The degree of the research topic elaboration
The general theoretical fundamental of enterprise internationalization of multinational enterprises are in the works of leading researchers of International Business (IB) science, (Johanson and Vahlne, 1977; Dunning, 1977, Peng,2001; Barney, Wright and Ketchen, 2001; Eden, 2004; Marinova, Child and Marinov; 2012; Hoskisson, Eden, Lau and Wright, 2000; Peng, Wang and Jiang, 2008; He, Xie and Zhu, 2015; Huang, Ye, Zhou and Jin, 2017; Buckley, Clegg, Voss and Chen, 2018) Cantwell, Dunning and Lundan, 2010; Zhang, Tansuhaj and McCullough, 2009; Holburn and Zelner, 2010; Teece, 2014)
The works of these researchers present theoretical foundations that explain the motivation of firm’s internationalization and set the scientific research vector in the field of foreign direct investments. Based on the empirical results, the researchers draw conclusions about the determinants firm’s foreign direct investments, identifying of factors influencing those investments: institutional factors (Globerman and Shapiro 2003, Habib and Zurawicki 2002, Loree and Guisinger 1995); demand-side factors (Rogmans and Ebbers, 2013; Zhang and He, 2014; Apaydin, 2009); and supply-side (Na and Lightfoot 2006; Quazi 2007; Hoang and Goujon, 2014). According to another point of view represented in the literature, the foreign direct investment factors can be divided into “push” and “pull” factors (Buckley et al. 2007, Child and Marinova 2014, Luo et al. 2010; Ramamurti 2012)
The increasing participation of multinationals from emerging countries (EMNEs) in the international market challenged the conventional outward foreign direct investment theories based on the behavior on multinationals from developed markets
The aspects of the foreign direct investment theories focusing on Emerging Market were considered in the work of (Cuervo-Cazurra and Genc, 2008; Rugman, 2009; Peng, 2012; Ramamurti, 2012; Hashai and Buckley, 2014; Williamson, 2015; Williamson and Wan, 2018). The institutional perspective has been popular among the scholars who want to investigate the effect of home country on emerging markets multinationals’ outward foreign direct investment (Hoskisson, Eden, Lau and Wright, 2000; Peng, Wang and Jiang, 2008; He, Xie and Zhu, 2015; Huang, Ye, Zhou and Jin, 2017; Buckley, Clegg, Voss and Chen, 2018). In addition, several new perspectives that treat emerging markets multinationals as latecomers to the international market enrich the literature on emerging markets multinationals, such as the exploration perspective (Park and Xiao, 2017), the springboard perspective (Luo and Tung, 2007), and the ambidexterity perspective (Luo and Rui, 2009).
The leading causes of emerging markets multinationals rapid expansion and competitive successes has been the subject of intense scrutiny by international academic community (Buckley, 2018; Deng, 2012, 2013; Deng et al., 2017; Meyer and Thaijongrak, 2013; Ramamurti, 2012;....
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