Migrant networks, international experience, and OFDI by EMNEs: Evidence from China

Abstract

AbstractThe impact of international migrant networks on outward foreign direct investment (OFDI) by multinational enterprises (MNEs) is an emerging research topic in the field of international business. Based on the data of A‐share listed companies from 2008 to 2020 in China, this study analyzes the impact of international migrant networks on OFDI by MNEs and further examines the moderating effect of firms' international experience. Our findings suggest that migrant networks have a facilitating effect on OFDI by MNEs, and firms' international experience plays a positive moderating role in the above relationship. We also find that the facilitation effect of migrant networks on OFDI by MNEs is more obvious in the context of greater geographical and cultural distance, indicating the positive effect of migrant networks in reducing information asymmetry and transaction costs. In addition, the facilitation effect of migrant networks on OFDI by MNEs is more significant in the subsample of the service industry. Our study contributes to the literature by providing new insights into the relationship between migrant networks and international expansion behavior.