Boosting business confidence for Chinese multinationals in the Belt and Road Initiative Online publication date: Thu, 23-May-2024
by Ya'nan Zhang; Di Fan; Yiyi Su
European J. of International Management (EJIM), Vol. 23, No. 2/3, 2024
Abstract: Foreign location choice is a critical strategic decision faced by Multinational Enterprises (MNEs). As investors' sentiments on business conditions and the degree of certainty of the future performance, business confidence plays a vital role in making such a location choice. In contrast to previous studies focusing on host country factors and a firm's dynamic capabilities, this study extends the business confidence perspective by incorporating dyadic ties between home and host country factors, viz., civilian, cultural and economic ties. Using 1093 greenfield investment projects carried out by Chinese multinationals in the Belt and Road Initiative (BRI) participating countries between 2013 and 2019, our findings suggest that all three ties enhance firms' business confidence to make investment decisions. Further, the findings are subject to heterogeneous ownership forms. Compared with State-Owned Enterprises (SOEs), non-SOEs rely more on the three ties to boost business confidence.
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