SOAS Research Online

Abstract

This study intends to probe into the influence of different specific dimensions under formal versus informal institutional distances on sub-motives of emerging-market (EM) multinational enterprises (MNEs) strategic-asset seeking (SAS), in order to gain insights into the understanding of new trend of outward foreign direct investment (OFDI) from emerging economies like China. By adopting multinomial logistic regression through accessing to both macro and firm level data, we find that EMNEs would focus more on formal rather than informal institutional distance for seeking all types of strategic assets. Simultaneous results show that with higher formal institutional distance between home and host countries, the possibility of acquiring both patents and trademarks has significantly increased. While the informal distance is solely correlated with the motive of seeking trademarks only.