The influence of motivations on international location choice in least developed, emerging and developed countries: evidence from Chinese MNEs
ISSN: 1750-614X
Article publication date: 2 June 2021
Issue publication date: 25 March 2022
Abstract
Purpose
This research aims to assess variations of motivations when studying international location decisions. In particular, this study aims to assess the influence of diverse motivations – seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints – as determinants of the international location choice of emerging market multinational enterprises (EM MNEs) entering least developed, emerging, and developed countries.
Design/methodology/approach
The authors develop a set of hypotheses based on the ownership–location–internalization framework and complement it with an institutional perspective. The conceptual model posits that the different internationalization motivations (seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints) will impact the location choice of EM MNEs in developed economies, emerging markets or least developed countries. This study uses the 2013 survey data collected by the China Council for the Promotion of International Trade and the Asia Pacific Foundation of Canada. The final sample of analysis of this research includes 693 observations.
Findings
After controlling for several variables, two-stage Heckman regressions show there is a variation of motivations when EM MNEs enter least developed countries, emerging markets and developed economies. EM MNEs are motivated to enter least developed countries to seek markets and resources. Conversely, those firms enter developed countries in their search for technological assets and to escape institutional constraints at home. While the present study findings show a clear difference in the motivations that lead to location choice in least developed vs developed countries, the results are not as clear for location in other emerging countries.
Research limitations/implications
The paper offers empirical support for the importance of motivations as crucial determinants of location choice.
Originality/value
This paper provides a detailed quantitative study on the internationalization location choice of EM MNEs based on their motivations. Though theoretical models underscore the importance of motivations, we know very little about how, in practice, motivations drive location choice. This study contributes to the international location choice literature a deeper understanding of how diverse motivations drive choices of expansion into developed economies, emerging markets or least developed countries.
Keywords
Acknowledgements
The authors gratefully acknowledge the Asia Pacific Foundation of Canada and Kenny Zhang for providing access to the 2013 survey data of Chinese companies’ OFDI behavior and intentions. We are thankful for the comments provided by participants at the 2018 Academy of International Business Conference. We are also very thankful for the constructive comments provided by Professor Cherrie Zhu, the Associate Editor and referees; their recommendations help improve the paper greatly. We thank the financial support provided by MacEwan University School of Business.
Citation
Angulo-Ruiz, F., Pergelova, A. and Wei, W.X. (2022), "The influence of motivations on international location choice in least developed, emerging and developed countries: evidence from Chinese MNEs", Chinese Management Studies, Vol. 16 No. 2, pp. 245-273. https://doi.org/10.1108/CMS-05-2020-0182
Publisher
:Emerald Publishing Limited
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