The Exit Decision of Chinese Foreign Subsidiaries: Is It Institutional Distance or Institutional Profile That Matters?

• 영문명: The Exit Decision of Chinese Foreign Subsidiaries: Is It Institutional Distance or Institutional Profile That Matters?
• 발행기관: 한국무역연구원
• 저자명: Qi Chen Huaqiang Su
• 간행물 정보: 『무역연구』제20권 제3호, 1~28쪽, 전체 28쪽
• 주제분류: 경제경영 > 무역학
• 파일형태: PDF
• 발행일자: 2024.06.30

국문 초록

Purpose - The effect of institutional distance and institutional profile has been well documented. However, the effects of these two are sometimes indistinguishable and highly correlated, and few studies have analyzed empirically which one really matters. This study focuses on the exit of foreign subsidiaries from the host country to determine whether institutional distance or institutional profile affects the exit of foreign subsidiaries. Design/Methodology/Approach - The sample includes 7,098 foreign subsidiaries established by 2,401 Chinese listed manufacturing firms in 121 countries during the period of 2007 to 2017. Using China as a benchmark, we divided the host countries into those with institutions better than China and those with institutions worse than China, and analyzed the effects of institutional profile and institutional distance separately. Findings - The logit regression results showed that in countries with better institutions than China, institutional profile has a negative impact on the exit of foreign subsidiaries, while in countries with worse institutions than China, institutional profile has a positive impact on the exit of foreign subsidiaries. However, institutional distance has a negative impact on the exit of foreign subsidiaries, and this impact is not affected by the institutional level of the host countries. Therefore, we conclude that it is institutional distance, rather than institutional profile, that affects the exit of Chinese foreign subsidiaries. Research Implications - This study empirically determined which factor affects the exit of foreign subsidiaries after entering foreign markets, and provides a clearer guide for the development of internationalization strategies.

목차

Ⅰ. Introduction

Ⅱ. Institutional Distance, Institutional Profile, and Firm Exit Decision

Ⅲ. Hypothesis Development

Ⅳ. Methodology

Ⅴ. Analysis Results

Ⅵ. Discussion

Ⅶ. Concluding Remarks

References

키워드

Chinese Foreign Subsidiaries Exit Decision Institutional Distance Institutional Profile