Theoretical foundations of equity based foreign market entry decisions: a review of the literature and recommendations for future research

This paper reviews the theoretical foundations of the equity based foreign market entry (FME) decisions literature. We analyse 1055 academic FME papers published over four decades (1970–2013). We identify and analyse the theories that informed and guided FME research over time. Our review indicates that scholars have recently started to challenge some of the core assumptions of established theories, draw on and integrate insights from multiple theoretical perspectives which, in turn, generated a multiplicity of approaches for studying FME decisions and their performance outcomes. The paper discusses the explanatory power of the different theories, assesses the relevance of the different theoretical perspectives to our understanding of current FME phenomena and recommends directions for further research

Country-of-origin Effects of Foreign Investments in the People's Republic of China

This paper investigates the existence of country-of-origin effects occurring in foreign investments in the People's Republic of China. The eclectic theory of international production posits that the pattern of foreign investments should vary by country of origin. This aspect of the eclectic theory is difficult to test directly, especially in developing countries, because of the relatively small numbers of foreign investment projects in a single country. The data used in this research cover 1,665 Sino-foreign joint ventures (JVs) from 1979 to 1985, allowing a more reliable test of this aspect of the theory. Statistical evidence suggests that country-of-origin effects are indeed present in foreign investment activities in China.© 1993 JIBS. Journal of International Business Studies (1993) 24, 277–290

The export-diversifying impact of Japanese and US foreign direct investments in the Indian manufacturing sector

The paper highlights the export-diversifying impact of foreign direct investment (FDI) in a developing country. FDI may lead to export diversification in the host country if it positively affects the export intensity of industries that have a low share in world exports. Indirectly, FDI may encourage export diversification through spillover effects: that is, the presence of FDI in an industry may increase the export intensity of domestic firms. The empirical results for the Indian economy in the post-liberalisation period show that FDI from the US has led to diversification of India's exports, both directly and indirectly. However, Japanese FDI has had no significant impact on India's exports. Journal of International Business Studies (2006) 37, 558–568. doi:10.1057/palgrave.jibs.8400207

The role of labour cost in the location choices of Japanese investors in China

This article attempts to reconcile previous conflicting findings about the effects of labour cost on the location decisions of foreign investors in China. A conditional logit model is calibrated with its compatible disaggregated firm-level Japanese FDI data. It is hypothesised that previous counter-intuitively positive relationships between labour cost and incoming FDI in China may result from the failures to properly control spatial inflation differentials, labour quality, and quality of life. A Hausman-McFadden test is also conducted to test the robustness of the calibrated models. Copyright (c) 2006 the author(s). Journal compilation (c) 2006 RSAI.