The global economy has benefited significantly from globalization, allowing multinational enterprises (MNEs) to move beyond their borders and reach new markets. Indeed, forming strategic alliances is a part of this expansion strategy and an important tool for MNEs to streamline the challenges present within different global markets that are invariably competitive. These partnerships, frequently with local companies or fellow international titans, not only grant MNEs invaluable insights into the regulatory landscape and consumer markets of foreign countries but also extend opportunities to leverage capital reserves that are difficult for local competitors. You mention that strategic alliances reduce many of the risks associated with foreign entry modes (e.g., cultural differences, political instability or unfamiliar legal environments) experienced by MNEs. The use of alliances is increasingly seen as a way to pool resources, exploit technological innovation, and quicken the pace in bringing new products or services into development, ultimately providing a competitive advantage. Since the innovation process in sectors such as pharma and technology with high sunk R&D costs is lengthy, MNEs can reduce their costs up to the post-decisive stage by sharing risk among allies using specific capabilities of each other. We conclusively state that strategic alliances are key instruments for MNEs globalisation, enabling a more flexible and adaptable market expansion process that favours innovation with the needed fast agility to cope abrupt changes in economic environment worldwide.

Since the removal of Qualified Foreign Institutional Investor (QFFI) quotas in 2019, foreign capital has become a pivotal long-term investor in China’s A-share market; yet systematic evidence on whether these institutions screen firms for information transparency at the micro level remains scarce. Examining 15,216 firm-year observations from 2019 to 2023, we proxy information opacity by the sum of absolute discretionary accruals over the preceding three years and estimate a Logit model of annual QFII holding decisions. A two-sample t-test shows that firms held by QFIIs exhibit significantly lower opacity than those not held, while the Logit results indicate that a one-unit increase in opacity reduces the probability of QFII ownership by 1.102 percentage points. These findings demonstrate that transparency serves as a primary threshold for foreign entry. Accordingly, regulators should therefore strengthen disclosure requirements, while firms should curtail earnings management, to enhance A-share attractiveness to long-horizon foreign capital and bolster China’s global market competitiveness.

Does the Home State Political Alignment Influence MNE Internationalization Strategy? The Role of Home State Political Alignment on MNE Foreign Entry Mode

Purpose This study aims to examine how the practices of companies from the same home country as a focal firm create mimetic isomorphic pressure on that firm’s choice of foreign distribution entry mode within the same host country industry. Design/methodology/approach Analysis was based on 3,023 cases of foreign direct investment in distribution by 916 Spanish firms. These cases were spread across 100 countries and 62 industries between 1997 and 2008. Binomial probit models with random coefficients were used to control for the existence of unobserved heterogeneity due to interorganisational relationships. Findings Foreign entry by a focal firm through full control of the distribution channel is positively related to the frequency of previous full control entry by home country competitors in the same host country industry. The results support the idea that a focal firm experiences mimetic isomorphic pressure when choosing its foreign distribution entry mode. Furthermore, the study shows that this relationship is moderated by the regulatory quality of the host country. Originality/value Despite the relevance of institutional theory, little research has studied whether companies choose shared or full control of the foreign distribution channel to stay competitive and gain legitimacy. This study extends the literature by showing that firms display mimetic behaviour in relation to foreign distribution mode choices and that the regulatory quality of the host country moderates this behaviour.

This study examines how crisis dynamics enabled Japan’s exclusionary border control during the COVID-19 pandemic. Drawing on policy documents, content analysis, and international comparison, it reveals how emergency measures evolved into prolonged restrictions targeting foreign nationals. Japan maintained some of the strictest entry bans among developed nations, often exceeding epidemiological justification. The analysis demonstrates how crisis contexts facilitate exclusionary politics, turning borders into tools for political legitimation. These policies imposed significant economic, educational, and diplomatic costs. The findings illuminate the politics of foreign entry in times of crisis and underscore tensions between populist control and democratic inclusion. Not applicable.

Abstract This study explores the main factors influencing foreign direct investment (FDI) in 96 developing economies over the period 2003-2023. Using a multiple linear regression model based on country-level averages, the analysis examines the effects of GDP growth, GDP per capita, inflation, trade openness, exchange rate changes, external debt, industrial value added, and political stability. The results show that GDP per capita is a strong positive determinant of FDI, highlighting the importance of market size, income level, and purchasing power in attracting investors. Inflation also has a positive effect, suggesting that moderate and predictable price growth often reflects stable economic reforms and rising domestic demand. In contrast, the growth rate of industrial value added is negatively related to FDI, indicating that highly industrialized economies may face saturation or stronger local competition that limits new foreign entry. Robustness checks confirm that GDP per capita plays a central role, while removing exchange rate variables does not alter the results. Overall, the findings suggest that long-term structural conditions, rather than short-term economic fluctuations or currency movements, are the most consistent drivers of FDI in developing economies. Policy recommendations include maintaining price stability, managing external debt responsibly, improving trade and logistics systems, ensuring regulatory predictability, and strengthening local production capacity and skills to attract sustainable investment.

ABSTRACT Through the lenses of the resource‐based view (RBV) and signaling theory, this study investigates the link between corporate social performance (CSP) and acquisition premiums in cross‐border M&As, with a focus on the signaling role of CSP. The results confirm that targets' CSP serves as a value‐conveying signal that can shape acquirers' pricing decisions and informational landscape. Specifically, superior overall CSP corresponds to higher premiums; CSP concerns to discounts; and CSP strengths to no significant effect. Meanwhile, CSP signals help acquirers navigate both culture‐ and firm‐level information asymmetries, with the effectiveness of this signaling contingent on the type and magnitude of informational barriers.

ABSTRACTForeign direct investment (FDI) is a significant source of economic growth. Two important factors for attracting FDI are endogenously determined environmental policies and domestic policy stability, which we define as the ability of policymakers to continue established policies. We contribute to the literature by investigating the welfare implications of attracting FDI in a polluting sector where a government chooses a pollution tax given a policy stability level. We modify Helpman et al.'s (2004) FDI model with heterogeneous firms to determine the optimal pollution taxes and the welfare implications with or without FDI. Our model includes a heterogeneous polluting sector, a homogeneous non‐polluting sector, consumers negatively affected by pollution, and a policymaker who has a positive probability of being removed from office. We find that the pollution tax is higher when the polluting sector opens to FDI across all policy stability levels compared to the closed sector case. The pollution tax rate is reduced when the policy stability level increases. Welfare is generally higher when not allowing FDI in the polluting sector. The welfare loss due to uncertainty is reduced as the policy stability level increases because we approach the socially optimal pollution tax level. The difference in realised welfare between the closed and open FDI polluting sector cases is largest when there is low marginal pollution damage, high foreign entry cost, or a high elasticity of substitution.

This paper applies a micro-foundations approach to examine how risk propensities differ between state‑owned (SOE) and privately owned (POE) enterprise managers during foreign direct investment (FDI) decisions. Using evidence from China, we summarize contrasts in career paths, political ties, and incentive horizons that shape managerial cognition and risk perception. We then categorize risk tolerance through two lenses: past experiences and future expectations, showing that incorporating these micro factors aids us in analyzing FDI strategies more accurately than firm- and country-level factors alone. Building on this insight, we propose practical mechanisms for incentive design, project matching, and tenure management, and outline a future research agenda applying the same micro lens to investigate SOE and POE global strategies.

ABSTRACTIn response to the international financial crisis, China's actual utilization of foreign capital experienced a significant decline in 2009, followed by a rapid rebound that surpassed previous levels. This paper investigates the impact of the four‐trillion‐yuan stimulus package implemented by the Chinese government in 2008 on the dynamics of foreign investment. Our findings indicate that growth pressures drive local governments to actively utilize stimulus plans, thereby facilitating the entry of foreign firms. Mechanism tests reveal that the economic stimulus plan significantly encourages foreign entry through industrial land grants, while reductions in financing costs and tax incentives also play crucial roles. Furthermore, this study examines the heterogeneous effects of the economic stimulus plan on foreign firm entry, revealing a more pronounced impact on foreign investment from Hong Kong, Macao, and Taiwan (HMT FDI), as well as on foreign investment in coastal areas. This research offers a novel explanation for the dynamics of foreign investment in China from a macroeconomic policy perspective and contributes to the literature by evaluating the effectiveness of the economic stimulus package's implementation.

PurposeImproving productivity growth remains a central focus in the construction industry. However, whether the intensity of market competition (MCOMP) can improve construction productivity remains underexplored despite its potential impact, especially during changes in market regulation (MREG). Therefore, this paper examines whether the intensity of MCOMP has increased between two distinct phases of MREG in Malaysia: 2009–2014 and 2015–2020, with the latter period marked by a significant increase in MREG intensity. Subsequently, this paper models the impact of MCOMP on total factor productivity (TFP) and profit margin (PM) across 55 construction firms in Malaysia. In addition, the model includes the moderating effect of different phases of MREG by investigating how these impacts vary across two distinct phases of MREG: 2009–2014 and 2015–2020.Design/methodology/approachBoone’s relative profit difference (BRPD) test is used to assess the intensity of MCOMP, determining whether MCOMP has increased between 2009–2014 and 2015–2020. Unlike standard concentration metrics, BRPD captures how efficiency differences affect profitability, thus offering a more in-depth view of competition. Subsequently, the research employs the generalized method of moments (GMM) to model the impact of MCOMP on TFP and PM while addressing potential endogeneity issues related to reverse causality and omitted variable bias.FindingsThe BRPD test indicates a significant increase in competition intensity from 2009–2014 to 2015–2020. In addition, the GMM results show that MCOMP positively affected TFP across both phases, suggesting that competition drives firms to optimize firm productivity. While MCOMP positively affected profit margin from 2009–2014, this turned negative during 2015–2020 due to heightened MCOMP intensity. This is likely due to intensified bidding competition prompted by increased foreign entry and improved market-oriented policies. To remain competitive, firms may have improved the allocation of inputs and outputs to improve TFP, thus enabling firms to make cost and price adjustments and driving down PM aggressively.Originality/valueThis study’s methodological approach combines BPRD for evaluating changes in MCOMP intensity and GMM to model the impact of MCOMP on TFP and PM of construction firms during changes in MREG phases. The findings provide valuable implications for construction management and add conceptual clarity to understanding competition dynamics in the construction industry.

This study examines the impact of foreign entry liberalization on local firms' investment efficiency. Taking the implementation of the Negative List of Foreign Investment Entry as a policy shock, we construct a staggered difference-in-differences model based on data from China's A-share-listed firms between 2010 and 2022 for empirical analysis. Our findings found that (1) the liberalization of foreign investment entry reduces firms' investment efficiency (2) From the perspective of firm heterogeneity, liberalization of foreign investment entry exacerbates overinvestment in firms located in the central region, and firms facing high financing constraints. (3) The mechanism test shows that the inhibitory effect of foreign investment liberalization on the investment efficiency of enterprises comes from the intensification of the degree of market competition and the enhancement of environmental uncertainty. This study provides a new microscopic explanation for the mechanism of changes in China's enterprise investment efficiency from the perspective of foreign investment liberalization, which is of policy revelation significance for further optimizing the policy of introducing foreign investment and improving enterprise investment efficiency.

PurposeThe rise of digital technologies has led to the emergence of born digitals, which are firms distinguished by their digital business models and an early digitalization of their value chains. Despite the growing importance of these firms, their internationalization strategies, including the crucial choice of the most-suited foreign entry mode, have only been analyzed marginally by the extant literature. This paper aims to examine how born digitals select their entry mode and which context-specific modes are preferred.Design/methodology/approachBy advancing the institutional entry mode approach of Meyer et al. (2009) with the digitalization conditions of the target market, the authors propose a theoretical entry mode framework for born digitals, in which the institutional market support and the digitalization degree simultaneously affect the entry mode decision.FindingsThe authors conclude with two main propositions, arguing that a joint venture and a digital entry are preferable under weak institutions and acquisitions and greenfield projects otherwise. Depending on a high digitalization degree, digital and greenfield entry modes are beneficial.Originality/valueThis paper contributes to the literature by creating an entry mode framework for born digitals and by introducing a digital entry mode.

Canada is seriously lagging in productivity growth, which is the only means countries have to raise their citizens’ standard of living. Overall, Canadian business productivity fell by 0.6 per cent over the past five years. This is in sharp contrast to the United States, which enjoyed a 10.1 per cent increase over the same period. This trend of faster U.S. growth has held true since the mid-1990s, with Canadian productivity rising by about half as much as the American rate. In fact, Canada trails not only the U.S. but all advanced countries in Northern and Western Europe, as well as Australia. Going by sector, Canada’s recent productivity declines have been concentrated in holding companies, transportation and warehousing, construction and manufacturing. The latter three categories are responsible for two-thirds of the decline in productivity. For transportation and warehousing, the effects of the COVID-19 pandemic on travel are a major contributor. For construction, the decline comes from residential and non-residential work, as opposed to engineering construction. For manufacturing, a significant source is transportation equipment manufacturing, particularly in the automotive sector. Provincially, Alberta, Saskatchewan and Newfoundland and Labrador have the highest productivity, thanks to the oil and gas industry. B.C., Ontario, Quebec and Manitoba are slightly below the national average while the Maritime provinces have productivity levels 25 to 31 per cent lower than the national average. However, Ontario and Alberta are responsible for the lion’s share of Canada’s slumping productivity growth, due to their weight in the national economy. Ontario is behind 48 per cent of the decline, while Alberta’s share is 22 per cent. From 2020–23, Canada’s capital intensity grew only slightly — not much faster than hours worked. This means that investment has not been high enough to boost productivity. Canadian investment fell from 2.1 per cent annually from 1998–2019 to just 0.5 per cent annually between 2020 and 2023. The main culprits are non-residential buildings (such as offices and factories), along with machinery and equipment. Investment in these capital goods decreased by 5.9 per cent annually in the non-residential sector and by 3.1 per cent in machinery and equipment. The fall in non-residential investment is likely the result of more people working from home. The fall in machinery and equipment is more puzzling. With tight labour markets, companies should want to invest in automation to save on labour costs, but this doesn’t seem to be happening. Canada has seen essentially no productivity growth in recent years, and much of the decrease is in a few core sectors. The picture is not complete, but since the output of those industries is easy to measure, it suggests that the slowdown is real. To increase productivity, governments should look at income tax rates, excessive red tape, regulatory harmonization, a lack of competition and barriers to foreign entry into the economy. Governments also need to look at improving their own productivity to avoid crowding out the private sector and to free up resources. There isn’t a one-size-fits-all solution. A broad range of policy options are necessary to solve Canada’s productivity problem.

Network effects, word of mouth, and entry performance: A study of digital freemium products

What drives outward foreign direct investments (OFDIs) by emerging market firms (EMFs)? In emerging markets, firms can use entertainment expenses to build corporate relationships with governments and other important stakeholders. Developing local embeddedness is critical for foreign entrants to better learn and understand the host country and thus increase the likelihood of successful foreign entry. In 2012, China accelerated its anti-corruption campaigns, which limited the entertainment and travelling expenses for state-owned enterprises (SOEs). Leveraging this quasi-natural experiment, this paper shows that after the acceleration of the anti-corruption campaign, SOEs initiated less new OFDIs compared to non-SOEs. Further, as a reaction to this policy: firms prioritized their limited resources to OFDIs that were to a new country, which were in more need of a substantial resource commitment. However, firm-level anti-corruption CSR measures were not effective as a credible signal to a firm being corruption- free. We thus provide important implications for OFDI strategies for policy makers and firms in emerging economies.

This study investigates how domestic entrepreneurial firms (EFs) in the emerging economy of China strategize partnerships with established firms in response to technologically advanced foreign firm entry. While such partnerships are key for EFs to acquire market power and complementary knowledge assets, there are risks of potential misappropriation of EFs’ knowledge assets by established firms (or corporate “sharks”). We examine how domestic EFs can effectively partner with established corporate sharks in response to technologically advanced foreign entrants, particularly through corporate venture capital (CVC) investments. Using the context of Tesla’s Gigafactory entry into the Chinese new energy vehicle (NEV) industry as a result of a major top-down policy change to promote foreign competition in the domestic NEV market, we find an increase in syndicated partnerships formation between entry-affected EFs and CVC investors after tech-advanced foreign firm entry. This impact is more salient when independent venture capital (IVC) is involved, EFs are distant from coastal areas, and EFs are less prominent in the entrepreneurial setting. Our study sheds light on how EFs can strategically leverage domestic partnerships in response to foreign entrants and the understudied but important role of foreign firm entry in facilitating domestic collaborations in the entrepreneurial setting.

In pursuit of green, low-carbon, and sustainable development, Belt and Road Initiative (BRI) countries urgently require overseas investment in green projects. However, these investments face significant geopolitical risk (GPR) challenges. This study thoroughly investigates how GPR influences the foreign ownership decisions of Chinese enterprises investing in green projects in BRI countries. It further examines the dual moderating effects of corporate green technology capability and host green governance on this relationship. Empirical analysis was conducted using the fractional logit model, analyzing green overseas investment data from Chinese listed companies spanning from 2013 to 2022. The findings revealed the following: (1) high GPR leads Chinese enterprises to opt for low-ownership entry modes in their BRI green investments; (2) the negative impact of GPR on foreign ownership decisions can be offset by improving enterprises’ green technology capability; and (3) in BRI countries with advanced green governance, the negative impact of GPR on the foreign ownership-level decisions of Chinese enterprises is mitigated, and the moderating effect of corporate green technology capability is magnified. This study offers vital insights for multinational enterprises (MNEs) formulating their foreign entry ownership strategies for green overseas investments based on enterprise characteristics and host country conditions to effectively mitigate the impacts of GPR. Similarly, it offers important implications for host countries on attracting more green investments by enhancing their green governance levels to counteract GPR.

This article aims to analyse decisions about international entry modes from the stakeholder perspective, delving into different configurations of governance modes. A quantitative analysis is employed using data on 463 observations of Brazilian companies operating in foreign markets. We find that business group affiliation, support from institutional partners, and the characteristics of host market networks all influence company decisions to adopt lower control modes in international markets. The article contributes to international entry mode and franchising literature by applying stakeholder theory to choices about foreign entry modes. It shifts the focus away from the profit- and cost-related aspects of rational choice models towards recognizing the substantial impact of stakeholders, enriching our comprehension of this complex decision-making process. Our study further offers a more nuanced understanding of mode choice by investigating modes of international franchise governance with varying levels of commitment, control, and risk.

Taking a behavioral perspective, we explore how environmental diversity in a firm’s country portfolio shapes managers’ decisions to adjust the portfolio through foreign entries and exits. We argue that country portfolio diversity causes firms to exponentially incur behavioral failures and coordination costs that serve as a distress signal to managers, who therefore increasingly restrict foreign entries and increasingly undertake foreign exits as a function of such diversity. Applying performance feedback theory, we also argue that managers’ tendency to interpret behavioral failures and coordination costs from portfolio diversity as a distress signal – and, hence, their tendency to restrict entries and undertake exits as a function of such diversity – depends on whether their firm performs below or above their aspirations. Using measures of cultural, administrative, geographic and economic portfolio diversity, we find support for our ideas in a panel data analysis of all foreign entries and exits by 232 retailers from 24 countries over the period 2001–2007. Our findings illustrate the value of applying a behavioral lens to explain changes in a firm’s full set of international activities.