Title

Cultural distance, host regulatory quality, and location choice : a hierarchical analysis of Chinese multinationals

Document Type

Book chapter

Source Publication

Asian businesses in a turbulent environment : uncertainty and coping strategies

Publication Date

1-1-2016

First Page

65

Last Page

91

Publisher

Palgrave Macmillan

Abstract

The research presented in this chapter investigates the effect of both host and home institutional factors on emerging market multinational corporations’ choice of location for overseas investments. Drawing from prospect theory and recent theoretical development, we propose that cultural distance and host regulatory quality contribute to the attractiveness of a country, while home government relationship moderates the effect of host regulatory quality, and such effects vary across countries at different stages of economic development. Based on the data from overseas subsidiaries of Chinese multinational corporations, both cultural distance and host regulatory quality positively affect location choice. For less developed countries, there is a negative interaction between cultural distance and host regulatory quality, and home government relationship positively moderates the effect of host regulatory quality.

DOI

10.1057/978-1-137-48887-9_4

Publisher Statement

Copyright © The Editor(s) (if applicable) and The Author(s) 2016

Access to external full text or publisher's version may require subscription.

Additional Information

ISBN of the source publication: 9781137488855

Full-text Version

Publisher’s Version

Recommended Citation

Cui, G., Li, X., Peng, L., & Chan, T. S. (2016). Cultural distance, host regulatory quality, and location choice: A hierarchical analysis of Chinese multinationals. In T. S. Chan & G. Cui (Eds.), Asian businesses in a turbulent environment: Uncertainty and coping strategies (pp. 65-91). Basingstoke: Palgrave Macmillan. doi: 10.1057/978-1-137-48887-9_4