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Contribution to Book
Cultural distance, host regulatory quality, and location choice : a hierarchical analysis of Chinese multinationals
Asian businesses in a turbulent environment : uncertainty and coping strategies
  • Geng CUI, Lingnan University, Hong Kong
  • Xiaolin LI, Guangdong University of Finance and Economics
  • Ling PENG, Lingnan University, Hong Kong
  • Tsang Sing CHAN, Lingnan University, Hong Kong
Document Type
Book chapter
Publication Date
1-1-2016
Publisher
Palgrave Macmillan
Abstract
The research presented in this chapter investigates the effect of both host and home institutional factors on emerging market multinational corporations’ choice of location for overseas investments. Drawing from prospect theory and recent theoretical development, we propose that cultural distance and host regulatory quality contribute to the attractiveness of a country, while home government relationship moderates the effect of host regulatory quality, and such effects vary across countries at different stages of economic development. Based on the data from overseas subsidiaries of Chinese multinational corporations, both cultural distance and host regulatory quality positively affect location choice. For less developed countries, there is a negative interaction between cultural distance and host regulatory quality, and home government relationship positively moderates the effect of host regulatory quality.
DOI
10.1057/978-1-137-48887-9_4
Publisher Statement

Copyright © The Editor(s) (if applicable) and The Author(s) 2016

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Additional Information
ISBN of the source publication: 9781137488855
Full-text Version
Publisher’s Version
Citation Information
Cui, G., Li, X., Peng, L., & Chan, T. S. (2016). Cultural distance, host regulatory quality, and location choice: A hierarchical analysis of Chinese multinationals. In T. S. Chan & G. Cui (Eds.), Asian businesses in a turbulent environment: Uncertainty and coping strategies (pp. 65-91). Basingstoke: Palgrave Macmillan. doi: 10.1057/978-1-137-48887-9_4