The Impacts of Outward Foreign Direct Investment on Home Firm's Productivity: A Study of Chinese Multinationals

Abstract

This paper examines the impacts of outward foreign direct investment (OFDI) on the home firm's productivity in an emerging economy. Based on the literature review and findings from this paper of Chinese outward investing firms, we develop a conceptual framework that integrates the resource-based view, industrial organization economics, and institutional view of international business study. In our findings, they show that the integrating model of three aspects have higher explanation than the individual aspect model. We use firm-level data to explain how the firm-specific factors, industrial factors, and national institution factors affect productivity in Chinese OFDI firms. Also, this analysis of firm-level data can provide evidences in the effectiveness of resource using, competitiveness, and policy impact on individual firms.