Subnational social trust and the internationalization of emerging market firms

Chen, X. ORCID: https://orcid.org/0000-0002-0597-4352 and Wu, C. (2023) Subnational social trust and the internationalization of emerging market firms. Journal of Business Research, 158. 113661. ISSN 1873-7978 doi: 10.1016/j.jbusres.2023.113661

Abstract/Summary

This study examines how informal institutions at the home country subnational level drive the foreign direct investment (FDI) of firms from emerging markets, where informal institutions play a salient role because of the underdevelopment of formal institutions. Integrating the institutional escape view and institutional support view, we argue that social trust, as a critical dimension of informal institutions, affects firms’ FDI decisions. Using a sample of publicly listed firms in China, our empirical analysis finds an inverted U-shaped relationship between subnational social trust and the likelihood of firms’ international expansions. Furthermore, this relationship is contingent on firms’ affiliations with business groups.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/118350
Identification Number/DOI	10.1016/j.jbusres.2023.113661
Refereed	Yes
Divisions	No Reading authors. Back catalogue items Henley Business School > International Business and Strategy
Publisher	Elsevier
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