Internationalization of emerging economies : empirical investigation of cross-border mergers & acquisitions and greenfield investment by Chinese firms

This study incorporates the eclectic paradigm and institutional theory to examine the key determinants of Chinese firms' cross-border mergers and acquisitions (M&As) and greenfield (GF) investment in advanced economies (AEs) and developing economies (DEs) during the period 2003-2016. It uses a negative binomial regression model. In terms of M&As, our findings are consistent with the growing theoretical literature on emerging market multinational enterprises (EM MNEs). However, Chinese firms' GF investments in AEs and DEs show results that are inconsistent with predictions, which means that research on GF investment requires more scrutiny and in-depth analysis. Although both economic and institutional factors affect Chinese firms' location strategies, institutions tend to play a more dynamic role in shaping the location decisions for Chinese GF investments, implying that institutional context has a greater moderating effect on the link between investment motives and GF activity. In a nutshell, one should be cautious in generalizing Chinese cross-border M&A deals to GF investments or other entry modes.