External factors and outward foreign direct investment by Chinese firms

Drawing on the institutional lens and the global political economy (GPE) perspective, the thesis firstly examines the role of home-government support and interstate relational factors in shaping Chinese multinational enterprises (MNEs) overseas subsidiary performance. The author tackles two aspects of home-government support: financial support and non-financial policy support. Moreover, their effects under the contingency of interstate relational factors are considered. Using survey data, the findings show that Chinese MNEs subsidiary performance is positively related to the degree of home-government non-financial policy support but not financial support. The effect of non-financial policy support is moderated by interstate political and economic relations. Stronger interstate political relations augment the impact of non-financial policy support on subsidiary performance, whereas interstate economic relations have a substitutive effect. The thesis further addresses the role of home-country legitimacy on the level of political risk faced by Chinese MNEs when venturing internationally. Highlighting the notion of legitimacy under the institutional perspective, the author suggests that the level of political risk encountered by Chinese firms is jointly determined by the institutional governance quality and firms home-country legitimacy with key stakeholders in a host country. While host-country political and regulatory governance quality remain important factors in explaining the political risk faced by Chinese MNEs, their effects tend to diminish due to the lack of social acceptance of a firm s home country with the host-country government, industrial agencies and general public. Finally, this thesis explores how political risk is conceived by Chinese MNEs when competing in the global arena. Based on qualitative interviews with managers of Chinese firms, the study provides a fine-grained analysis about the way that political risk is perceived by Chinese companies operating in developed and developing host countries, specifically, the European Union (EU) and Africa. The findings reveal that Chinese MNEs perceive that political risk can go beyond the conventional source of host-country political turmoil. The baggage carried by Chinese firms due to different ideologies between their home and host countries, and the host-government s concern over the motives behind these firms activities, represent a source of political risk arise from firms home country. The study shows that Chinese MNEs regard their home-country origin and industry-specific restrictions as major political risks in the EU. By contrast, they consider the volatile political environment in some African countries as the main source of political risk. In addition to the sharp contrast of the political and regulatory environments between the EU and Africa, Chinese firms commonly face political risk in both markets due to their own behaviours