Developed Economy Investment Promotion Agencies and Emerging Market Foreign Direct Investment: The Case of Chinese FDI in Canada

Anderson, J.; Sutherland, D.

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.

Citation

Anderson, J., & Sutherland, D. (2015). Developed Economy Investment Promotion Agencies and Emerging Market Foreign Direct Investment: The Case of Chinese FDI in Canada. Journal of World Business, 50(4), 815-825. https://doi.org/10.1016/j.jwb.2015.04.005

• Journal Article Type: Article
• Acceptance Date: Apr 21, 2015
• Online Publication Date: May 8, 2015
• Publication Date: Oct 1, 2015
• Deposit Date: Apr 22, 2015
• Publicly Available Date: Nov 8, 2016
• Journal: Journal of World Business
• Print ISSN: 1090-9516
• Electronic ISSN: 1878-5573
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 50
• Issue: 4
• Pages: 815-825
• DOI: https://doi.org/10.1016/j.jwb.2015.04.005
• Keywords: Investment promotion agency, Emerging market, Psychic distance, China, Canada, FDI.
• Public URL: https://durham-repository.worktribe.com/output/1430887