Strategic Asset-Seeking FDI by Emerging Economy Enterprises: The Enabler and Motivator

Research on outbound foreign direct investment (OFDI), including traditional and strategic-asset-seeking (SAS) OFDI from emerging economies, has been drawing more and more attention. Yet, few studies have empirically examined the logic lying behind choosing SAS vs. traditional OFDI by emerging economy enterprises. Our study theorizes and examines the impact of internal capability-absorptive capacity and external context-industry openness on the propensity of emerging economy enterprises (EEEs) to engage in strategic asset-seeking OFDI vs. traditional FDI. Our findings show that both internal and external factors exert remarkable impacts on the EEEs’ choice of SAS FDI. Strong absorptive capacity enables EEEs to engage in SAS FDI and high degree of industry openness motivates EEEs to engage in SAS FDI. We contribute to FDI literature by identifying the internal enablers and external motivators of EEEs’ SAS FDI and their interaction effects on EEEs’ propensity to engage SAS FDI.