Springboard theory emphasizes the imperative for emerging market multinational enterprises (EMNEs) to catch up with developed market MNEs (DMNEs) by acquiring and repatriating assets from strategic asset-rich foreign targets. However, the theory underemphasizes the location-bound nature of many target firm capabilities, which may compel acquirers to invest in those firms in situ. We hypothesize that EMNEs, in pursuing firm-level catch-up, are more likely than DMNEs to foster post-acquisition intangible asset growth in target firms. We further argue that (a) institutional distance and (b) related international experience positively moderate this effect for EMNEs, while (c) cultural distance exerts a comparatively stronger negative impact on them. Using a longitudinal sample of 1975 intangible asset-rich target firms and 1373 acquirers from 2010 to 2019, we employ propensity score matching and time-varying difference-in-differences analysis. Our results support the hypothesized differences and offer implications for EMNE strategy, the refinement of springboard theory, and policy design.

Purpose This study comments on how the fragmentation of liberal globalisation and the resurgence of geopolitical rivalry, industrial policy and economic security concerns may be reshaping the organisation of international business. It argues that these developments may increase the importance of state capabilities, industrial ecosystems and politically embedded forms of internationalisation, making aspects of Chinese MNE expansion increasingly relevant to understanding the future evolution of international business. Design/methodology/approach This study adopts a conceptual and historical approach drawing upon international business, economic history, development studies and contemporary geopolitical scholarship. Itsynthesises historical evidence on politically embedded commerce with recent developments in Chinese outward investment to develop a forward-looking perspective on the future organisation of international business. Findings This study argues the highly liberalised international economy that shaped much contemporary IB theory may prove historically exceptional rather than normal. As geopolitical fragmentation increases the importance of strategic coordination, industrial policy and economic security, organisational arrangements that embed firms within broader industrial and political systems may become increasingly advantageous. Chinese MNEs, overseas economic zones and industrial ecosystems may therefore represent early organisational forms adapted to a more fragmented and politically contested international economy. It further suggests that states may accumulate capabilities through learning processes analogous to those described in the dynamic capabilities’ literature, enabling them to coordinate industrial transformation and internationalisation under conditions of uncertainty. Research limitations/implications This paper is conceptual and interpretive rather than empirical. Future research should examine how state capabilities emerge and evolve, how industrial ecosystems generate international competitive advantages and how new organisational forms such as overseas economic zones influence the organisation of international business under conditions of geopolitical fragmentation. Practical implications The analysis suggests that managers and policymakers may need to reconsider assumptions developed during the liberal globalisation era. As geopolitical rivalry and industrial policy increasingly shape international business, successful internationalisation may depend not only on firm-specific capabilities but also on access to supportive industrial ecosystems and effective relationships with governments and other institutional actors. Policymakers seeking to attract investment may likewise need to focus on developing broader industrial ecosystems, supply-chain capabilities and strategic coordination mechanisms rather than relying solely on market incentives. Understanding how firms and states jointly manage uncertainty may therefore become increasingly important for international competitiveness. Social implications The growing importance of industrial policy, economic security and state-supported internationalisation has implications that extend beyond firms and markets. As governments play a more active role in shaping industrial development and technological competition, decisions regarding investment, innovation, infrastructure and supply-chain organisation may increasingly influence employment opportunities, regional development and economic resilience. The analysis highlights the broader societal consequences of geopolitical fragmentation and suggests that debates concerning the organisation of international business are also debates about how economic power, technological capabilities and development opportunities are distributed across countries and regions within the global economy. Originality/value The study contributes to IB scholarship by extending analysis beyond the MNE as an isolated unit of analysis and highlighting the growing importance of state capabilities, industrial ecosystems and politically embedded organisational forms. It proposes that contemporary Chinese internationalisation may provide an important window into the future evolution of international business in an increasingly fragmented global economy.

Do emerging market (E)MNEs, compared with developed market (D)MNEs, engage in more post-acquisition hiring when acquiring foreign high-tech firms? Drawing on the concepts of 'home base augmentation' and 'catching up by hiring' and extending them to high-tech cross-border M&As, we argue that EMNEs use postacquisition hiring to access knowledge and embed themselves in world leading innovation networks to build innovation related dynamic capabilities. Using a large, matched sample of cross-border acquisitions, we find that EMNE acquisitions are associated with significantly higher post-acquisition employment growth than DMNE acquisitions. This effect is especially strong when targets are located in developed market technological clusters. These findings suggest that employment growth is not merely a by-product of acquisition, but a deliberate strategy through which EMNEs develop technological capabilities.

FDI motives are typically explained by external location advantages and institutional differences. International business research has paid less attention to how internal governance structures influence FDI. We examine whether employee ownership, operationalized as S-corp ESOPs, conditions the motives of outward FDI. Drawing on stakeholder-oriented governance theory and the capability-based perspective, we argue that employee ownership heightens sensitivity to strategies that impose concentrated domestic labor costs while favoring investments aligned with long-term capability upgrading. We test these arguments using 37,968 US outward greenfield FDI projects (2003–2023) matched to tax-based records identifying S-corp ESOP firms. Multinomial logit models show that ESOP firms are significantly less likely to undertake efficiency-seeking projects and significantly more likely to pursue strategic asset-seeking FDI than non-ESOP firms. We did not find any systematic difference in market-seeking behavior between ESOP and non-ESOP firms. These findings position employee ownership as a governance-based micro-foundation of FDI motives.

Corporate inversions, whereby MNEs relocate their ultimate owner to another jurisdiction, pose potential challenges for IB researchers developing samples of MNEs and their foreign subsidiaries using firm-level databases like Orbis. Here we develop a method for identifying inverted MNEs from around the world. We then test two hypotheses relating to whether systematic biases may exist in MNE sampling procedures. Analyzing data from over 52,000 MNEs across 30 nations, we hypothesise that emerging market MNEs and larger MNEs with extensive foreign networks are more likely to invert. Our findings confirm this, revealing systematic differences between inverted and non-inverted MNEs, leading to potential sampling biases. We discuss implications for current IB research and propose ways forward for enhancing cross country MNE sampling procedures.

FDI data has historically been recorded on a bilateral basis between the immediate origin and destination of the investor. This approach, however, makes its use problematic for understanding MNE activity because: (i) offshore corporate inversions may obscure the real origin of the MNE, leading to the exclusion of FDI from inverted businesses in data collected at the firm-level; and (ii) MNEs frequently transit capital via intermediary jurisdictions. Here we analyze the choice of Chinese MNEs to use inversions and capital in transit related FDI. Our econometric modeling explores whether systematic differences exist between private and state-owned MNEs in these two choices, finding the former are more predisposed towards inversions but not capital in transit. We argue from this that the prevalence of inversions systematically biases Chinese FDI data, with important implications for how we measure Chinese MNE activity. State-owned firms are overrepresented in Chinese FDI data, meaning their preferences and patterns are interpreted as more indicative of overall Chinese MNE behavior than is actually the case.

How does greenfield versus M A FDI establishment mode influence intangible asset creation in the parent companies of Chinese MNEs undertaking overseas knowledge sourcing/strategic asset-seeking types of FDI? We hypothesise that while springboard type cross-border acquisitions provide opportunities for the rapid addition of locally embedded competence-creating foreign subsidiaries, challenges in developing intra-MNE knowledge diffusion channels may frustrate integration and thus retard subsequent growth of parent firms’ intangible assets. Greenfield R D FDI, by contrast, may initially lack local embeddedness but holds out the potential for superior intra-MNE linkages and thus reverse knowledge diffusion to the MNE parent. Our results, based upon propensity score matching and difference in difference models comparing CMNE parent outcomes for FDI projects over the 2003–2018 period, support this argument. We discuss implications for mainstream international business theorising, including springboard theory, which largely overlooks greenfield establishment mode as a means of rapid firm-level catch-up for emerging market MNEs.

Strategic asset seeking foreign direct investment has undergone tremendous growth over the past decade. This paper first attempts to evaluate the location choice of such investments in Europe. We find that Chinese companies target strategic assets in Europe. The paper then moves to understand the efficacy of these investments in terms of the creation of strategic assets in the Chinese parent company. Our results show the intangible assets of Chinese domestic parent firms significantly increase in the wake of their investments. For greenfield investments, there is a longer time-lag in creation of intangible strategic assets than for acquisitions. However, greenfield investments result in a larger increase in intangible asset creation than acquisition investments.

Multinational enterprises in emerging markets (EMNEs), owing to weak enforcement of intellectual property rights (IPR), face challenges when undertaking domestic innovation. As a result, they may search for superior IPR environments in which to create greenfield projects focused on research and development (R&D) and innovation. We hypothesize that the likelihood that an EMNE chooses to invest in an R&D-focused greenfield project over other FDI projects is positively associated with increased levels of host-country patent enforcement protection relative to its home market. In addition, we hypothesize that EMNEs, many in the process of catching up through “springboard” FDI with developed-market MNEs (DMNEs), are more sensitive to IPR protection than DMNEs. Results of logistic regression modelling of 112,908 greenfield projects largely support our hypotheses. We discuss implications for understanding EMNE theorizing and policy, which has to date focused more on regulating technology-seeking mergers and acquisitions (M&As), overlooking the growing importance of R&D-related greenfield FDI as an effective firm-level catch-up strategy for EMNEs.

Purpose Cities are host to many of the world’s knowledge intensive research and innovation clusters. As such, they are likely to be attractive locations for emerging market multinational enterprises (MNEs) seeking to engage in knowledge seeking “springboard” type firm-level catch-up strategies. The purpose of this study is to therefore explore whether city-based research-intensive clusters containing deep pools of location bounded (i.e. “sticky”) knowledge are a stronger driver for greenfield research and development (R&D)-related FDI projects for Chinese MNEs than they are for developed market MNEs. Design/methodology/approach The authors use logistic modelling on 97,163 worldwide greenfield FDI projects to explore the relative likelihoods of Chinese MNEs engaging in R&D-related greenfield (i.e. “strategic asset seeking”) FDI projects as well as how city type (global or research-intensive cluster city) moderates this relationship for Chinese MNEs. Findings The authors find that Chinese MNEs are more likely to engage in overseas R&D FDI projects (compared with other types of project) than DMNEs and that research-intensive city clusters hold a stronger attraction for Chinese MNEs than developed market MNEs. Research limitations/implications The authors discuss how the research contributes to the debate on emerging market MNE catch-up theory, as well as that on sub-national city location choice, by highlighting the growing importance of sub-national geography to understanding strategic asset seeking related greenfield FDI. Practical implications Sub-national city location choice is an important driver of strategic asset seeking FDI for Chinese MNEs, one that both national and local city level policymakers should pay attention to. Social implications Chinese FDI via aggressive mergers and acquisitions to acquire key technologies has been restricted in recent years. Policymakers must consider whether they may also wish to restrict Chinese greenfield FDI in R&D-related projects, which now exhibit a pronounced upward trend. Originality/value The authors highlight the growing importance of sub-national geography to understanding strategic asset seeking related greenfield FDI in Chinese MNEs (and how it plays, more generally, a central role in their strategies).

FDI data has, until recently, mostly been recorded on a bilateral basis between the immediate origin and destination of the investor. This makes the use of such data problematic for understanding MNE activity because: (i) MNEs frequently transit capital via intermediary jurisdictions and (ii) offshore corporate inversions obscures the real origin of the MNE. These practices are particularly common among MNEs from some jurisdictions, particularly emerging market MNEs such as those from China. This article analyzes Chinese outward FDI, accounting for capital in transit and corporate inversions to show clear differences in FDI practices by state-owned and private MNEs. Econometric modeling reveals that private MNEs engage in much higher levels of both capital in transit and corporate inversions than do stateowned MNEs, suggesting much greater nuance should be considered when studying and drawing conclusions about the FDI behavior of emerging market MNEs.

This paper explores (i) the extent to which Chinese multinational enterprises (CMNEs) undertake FDI via intermediary jurisdictions (also termed capital in transit (CIT)) and (ii) identifies the specific offshore locations used by CMNEs to conduct CIT. We use newly available OECD/IMF bilateral FDI stock data reporting both immediate and ultimate FDI between nations, which allows us to construct a CIT index and empirically test whether Chinese MNEs have a higher propensity for CIT than those from other countries. We demonstrate that CMNEs are indeed outliers with regard to CIT and identify the specific hubs they use drawing from the Orbis database. Our findings imply, among other things, that nationally aggregated Chinese FDI data is systematically biased when used for the purposes of measuring CMNE activity. We then discuss the problems this has created for many studies analysing CMNE activity that have used data collected at the firm-level. In conjunction, our empirical findings provide further insights into the extent, reasons and ways in which CMNEs exploit the offshore world and how this potentially confounds our understanding of their activities.

We agree with Aguinis and Gabriel that, contrary to Eden and Nielsen, international business (IB) is not uniquely complex, but argue that it faces two unique challenges. First, because it deals with cross-country phenomena, IB data are less plentiful and reliable. Second, because IB uses many imported theories, and they tend to be influenced by the national environment of their authors, they often have, taken as is, limited applicability in many of the contexts IB studies. We illustrate our twin points by examining the secondary data used in IB to measure the economic activities of multinational enterprises outside their home country, both at the country level, using foreign direct investment (FDI) data from balance of payments statistics, and at the firm level, using firm-level databases such as Orbis. We document the serious shortcomings of FDI data and the problems encountered in using firm-level data. We then highlight some of the cultural biases inherent in Williamson's version of transaction cost theory (TCT) but show how they can be overcome to arrive at a richer and more general theory that is applicable to a wider variety of contexts.

We examine the relationship between business group affiliation (BGA) of Chinese firms and their foreign acquisitive behavior in terms of technology and brand-oriented strategic assets. Drawing on new internalization, business group, and international business theory, we assert that Chinese business group affiliated firms will more likely pursue foreign acquisitions to seek strategic assets including patents but less likely to pursue foreign acquisitions to seek trademarks. Patents have non-location-bounded (NLB) properties that mean they can be exploited by the business group—not just the firm—back in the domestic market, while trademarks have location bounded (LB) properties that mean they are less easy to exploit by a business group domestically. Using a sample of 779 Chinese cross-border acquisitions between 2006 and 2015, we find support for arguments relating to the differences in relative attractiveness of targets holding patents vs. trademarks for Chinese firms linked to business groups. We discuss how this better helps us understand emerging market MNEs and related theory.

Purpose Many academic studies in international business empirically test the determinants of Chinese outward (O)FDI. A weakness with these studies is the limited critical evaluation given to the way in which Chinese OFDI data is collected and used. Chinese multinational enterprises (C)MNEs frequently establish special purpose entities in tax havens to transit FDI via intermediary jurisdictions. The purpose of this paper is to develop an alternative approach for measuring CMNE OFDI and subsequently explore how the results of previous studies may have been confounded use of tax havens by MNEs. The authors address the latter question by replicating widely cited quantitative studies. Design/methodology/approach Replication approach. Findings Through the replication of several studies, this paper finds high levels of discrepancies in general sign and significance between global ultimate ownership modeling results and those using officially recorded FDI data. More specifically, the main areas impacted by using official data rather than data which accounts for the use of tax havens are cultural proximity, geographic distance and natural resource seeking. Practical implications This paper looks at studies, which use official FDI data to understand CMNE behavior. It is important to note, however, that there are many hundreds, if not thousands, of studies that use other national-level FDI data to draw similar types of inferences about MNE activity. In this sense, the authors' critical evaluation of CMNE work holds a much broader and, arguably, more important question: How reliable, in general, are studies, which use officially recorded FDI data? The results from this paper have already caused reflection on the impact of tax haven use on official FDI collection organizations, such as the OECD. Social implications The social implications of companies using tax havens to route FDI is immense. The use of tax havens not only aids in tax minimization for companies, but also obscures the true providence and identity of companies. This is problematic in a society, which increasingly desires to understand where, how and by whom a product or service was created prior to consumption. Originality/value This paper argues that the tendency for Chinese MNEs to establish offshore holding companies in tax havens has given rise to significant biases in official FDI statistics. Through the use of global ultimate ownership data, the authors have put forward an alternate approach to measure genuine CMNEs' OFDI activity, one which confronts and deals with their pervasive engagement with tax havens. Through the replication of several Chinese OFDI location choice studies, it was possible to understand how methodological issues stemming from the use of official FDI data may influence prior econometric results. In doing so, the authors hope to have sparked a debate which may lead to a re-evaluation of earlier received wisdom regarding Chinese MNE investment strategy and behaviors. This in turn should foster improved theorizing regarding the Chinese MNE and its outward investment activities.