International friendship cities, regional government leaders, and outward foreign direct investment from China.

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Date: Jan. 2020
Publisher: Elsevier B.V.
Document Type: Report; Brief article
Length: 245 words

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Abstract :

Keywords Outward foreign direct investment (OFDI); Institution-based view; Institution-fostering view; International friendship city (IFC) relationship; Regional government leaders; Sub-national institution Abstract This study investigates an important yet overlooked phenomenon regarding the international friendship city (IFC) as a sub-national diplomatic relation that links host country cities sharing similarities. We theorize IFC relations as a proxy for an important institutional instrument for regional governments to facilitate outward foreign direct investment (OFDI). Drawing on the institution-fostering view, we argue that the greater the extent to which local governments become involved in developing IFCs, the better they are able to employ this instrument to foster OFDI. We further argue that the effectiveness of this instrument relies on the characteristics of regional leaders. The fostering effects of IFC development are stronger when regional leaders are at the later stage of their tenures and when they retain their positions. An analysis of 967 IFC relationships developed by 31 Chinese provincial governments with 102 countries supports our hypotheses. Author Affiliation: (a) International Business School Suzhou, Xi'an Jiaotong-Liverpool University, Suzhou, China (b) Discipline of International Business, The University of Sydney Business School, Sydney, Australia (c) Business School, Liaoning University, Shenyang, China * Corresponding author.at: Business School of Liaoning University, No. 58 Daoyi South Street, Shenbei New District, Shenyang, Liaoning Province 110136, China. Article History: Received 22 October 2018; Revised 19 September 2019; Accepted 22 September 2019 Byline: Yameng Zhang [Yameng.Zhang@xjtlu.edu.cn] (a), Wu Zhan [zhan.wu@sydney.edu.au] (b), Yekun Xu [xuyekun@lnu.edu.cn] (c,*), Vikas Kumar [vikas.kumar@sydney.edu.au] (b)

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Gale Document Number: GALE|A615520291