The Relationship between Home-region Orientation, Market-status Orientation and Firm's Performance

Abstract

Abstract:

Due to geographic distance constraint, multinational enterprises are generally believed to be home-region orientated (HRO) in their FDI location choice. However, emerging market multinational enterprises (EM MNEs) are proactively entering those industrialized economies (market-status orientated) with the purpose of acquiring markets and strategic assets, so geographic distance constraint is fading away. But the FDI behavior based on the market-status orientation (MSO) has yet to be examined. This paper aims to explore the effect of HRO and MSO on firm's financial and innovative performance. Our sample comes from the manufacturing enterprises listed on Shanghai and Shenzhen Stock Exchange between 2006 and 2013. The empirical results show that HRO has positive effects on firm's foreign sales, MSO has no significant effects on firm's foreign sales; their interaction has positive effect on firm's foreign sales; Both HRO and MSO have negative effects on firm's patents, as well as their interaction. Finally, conclusions and limitations are discussed.

Key words: FDI, emerging market multinational corporations, home-region orientation, market-status orientation, firm performance

Wu Bing, Yan Haifeng, Wu Qiqi, You Shuyun. The Relationship between Home-region Orientation, Market-status Orientation and Firm's Performance[J]. , 2017, 29(11): 62-73.

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