Please use this identifier to cite or link to this item: https://doi.org/10.1108/02651331011048005
Title: Inertia versus mimicry in location choices by Chinese multinationals
Authors: Yuan, L.
Pangarkar, N. 
Keywords: China
Developing countries
Market system
Multinational companies
Issue Date: 2010
Source: Yuan, L., Pangarkar, N. (2010). Inertia versus mimicry in location choices by Chinese multinationals. International Marketing Review 27 (3) : 295-315. ScholarBank@NUS Repository. https://doi.org/10.1108/02651331011048005
Abstract: Purpose: The purpose of this paper is to examine the determinants of foreign direct investment location - specifically whether firms enter a particular market or not. Drawing from the ecology and institutional theories, the paper identifies firms' own past (behavioral inertia) and rivals' past choices (behavioral mimicry) as key determinants of location selection. The paper identifies the differences between developing country multinationals (MNCs) and developed country MNCs and their (differences)' implications for the relative influence of mimetic versus inertial forces. Design/methodology/approach: A unique and comprehensive database about the location choices of 204 Chinese firms between 1992 and 2005 was constructed and conditional logistic regressions were deployed to assess the direct effects of behavioral inertia/mimicry, and the moderating effect of host country environment, on the location choices of the sampled firms. Findings: The paper finds that behavioral inertia has a stronger impact on the location decisions of Chinese MNCs than behavioral mimicry. It also finds that the host country's institutions, openness, and policy stability moderate the relationship between behavioral mimicry and inertia, on one hand, and location choice, on the other hand, possibly because of these factors' influence on the level of perceived uncertainty. Originality/value: This is the first paper modeling the simultaneous effects of behavioral inertia and mimicry on location choice and the moderating effect of host country environment on these relationships. The strong empirical support for all the predictions lends credence to the conceptual foundations of the hypothesized relationships. The focus on developing country MNCs, which possess several distinctive characteristics, and the unique dataset, should also enhance the paper's appeal. © Emerald Group Publishing Limited.
Source Title: International Marketing Review
URI: http://scholarbank.nus.edu.sg/handle/10635/44764
ISSN: 02651335
DOI: 10.1108/02651331011048005
Appears in Collections:Staff Publications

Show full item record
Files in This Item:
There are no files associated with this item.

SCOPUSTM   
Citations

12
checked on Feb 26, 2018

WEB OF SCIENCETM
Citations

13
checked on Feb 26, 2018

Page view(s)

74
checked on Apr 21, 2018

Google ScholarTM

Check

Altmetric


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.