Abstract
By analyzing the dynamic path of internationalization, this study attempts to explain the entry mode choice, location choice, and speed of entry in the process of internationalization from the learning results obtained from previous international activities. Our research shows that the speed of the entry process depends on the type of experiential learning generated by the implicit decision-making in the process of Internationalization: the entry mode choice and the market location choice. We find that the experience accumulated in the host country has an inverted U-shaped effect on the speed of entry; while the experience accumulated of the entry mode has a U-shaped impact on the speed of entry. We perform an event history analyses(EHA) on 153 Chinese innovative firms with 905 OFDI observations during the period from 1991 to 2015, and analysis what and why is the paths of internationalization of Chinese firms. We find that Chinese innovative MNEs have more likelihood to choice the entry mode of acquisition and WOS than other entry modes in OFDI activity, and there is a higher probability that the Chinese innovative MNEs choice the market location of developed countries than developing countries in OFDI activity. Most importantly, we find that accumulated experience in host country has an inverted U-shaped impact on the speed of internationalization operation with acquisition mode and the speed of internationalization in developed countries; while accumulated experience in focal entry mode has an U-shaped impect on the speed of internationalization operation with branch or WOS mode and the speed of internationalization in developing countries. This claim is supported by both non-parametric and parametric tests in the EHA. Our research highlights the short-term and long-term consequences of different types of paths associated with the internationalization process.
Highlights
The new development pattern will bring China higher quality opening-up to the outside world
China is committed to promoting a higher level of opening-up, promoting high-quality economic development, building a powerful economic and trade country, and creating a good development policy environment for "going out" enterprises to carry out foreign investment and cooperation[1]
Location choice is a dummy variable that represents the level of market locations choice, which is 1 for developed countries and 0 for developing countries[8]
Summary
The new development pattern will bring China higher quality opening-up to the outside world. China is committed to promoting a higher level of opening-up, promoting high-quality economic development, building a powerful economic and trade country, and creating a good development policy environment for "going out" enterprises to carry out foreign investment and cooperation[1]. In the year of 2020, COVID-19 has caused serious impact on the world economy, the Chinese government has made a decision to build a new development pattern of “domestic and international double circulation” as a main force. China's foreign investment cooperation will usher in new opportunities for development in terms of quality, efficiency, safety and sustainability. The high-speed growth and the big scale of China’s OFDI has drawn the attention of academics, business managers and policy-makers, and has resulted in increased research on this topic[2]. Compared with the volume of research on the antecedents of the paths of internationalization and the influence of internationalization on the firms’ performance, the area of research in the paths of internationalization has received the least attention
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