Political institutional imprinting and Chinese private enterprises’ initial ownership strategies in OFDI

Purpose There is consensus among scholars on how political institutional imprinting interprets the unique management and practice phenomenon of Chinese enterprises. However, little scholarly attention has been given to the different political institutional imprints that shape firms’ internationaliza...

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Bibliographic Details
Published in:Chinese management studies 2024-11, Vol.18 (6), p.1918-1944
Main Authors: Ma, Meiting, Wu, Xiaojie, Wang, Xiuqiong
Format: Article
Language:English
Subjects:
Deng Xiaoping
Foreign investment
Host country
Ideology
Institutionalism
International business
Legitimacy
Logic
Organizational behavior
Ownership
Political systems
Politics
Xi Jinping
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Summary:Purpose There is consensus among scholars on how political institutional imprinting interprets the unique management and practice phenomenon of Chinese enterprises. However, little scholarly attention has been given to the different political institutional imprints that shape firms’ internationalization. Therefore, this study aims to investigate how communist and market logic political institutional imprintings influence firms’ initial ownership strategies in outward foreign direct investment. Design/methodology/approach Based on the propensity score matching difference in difference method and a sample of 464 foreign investments from 2009 to 2020 for 310 Chinese private firms. Findings The results show that private firms with market logic political institutional imprintings tend to adopt higher ownership and vice versa. As institutional differences increase, private firms with market logic imprintings are more risk-taking and adopt higher ownership, whereas private firms with communist imprintings are more conservative and choose lower ownership. When diplomatic relations are friendlier, private firms with market logic imprintings prefer higher ownership to grasp business opportunities and vice versa. Originality/value This study not only identifies the net effect of political institutional imprinting on private firms’ initial ownership strategy but also investigates the different moderating effects of current institutional forces to respond to the call for research on bringing history back into international business research and the fit between imprinting and the environment.
ISSN:1750-614X
1750-6158
DOI:10.1108/CMS-04-2023-0157