Abstract:
This study explores the importance of multinational enterprise’s (MNE) home country by investigating how state involvement via policymaking impacts the international expansion of emerging market firms. By incorporating the concept of institutional work with the conventional resource- and institution-based observations of MNE operations, this study focuses on the influence that a government-initiated institutional environment has on the internationalization process of domestic firms. Based on qualitative data collected from China – the largest emerging economy and the biggest outward foreign direct investment (OFDI) contributor among all non-developed nations – this study develops a greater understanding of the issues among domestic firms in the process of internationalization, the dedicated institutional environment in which they operate, established as part of the development of a national OFDI regime, and the creators of these institutional processes. The findings suggest that, while the OFDI policy system was initially established by the nation’s governments, the stability, instability and the potential evolution of this institutional environment have been jointly shaped by both policymakers and business entities through the lens of institutional agency.
