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

Yameng Zhang, Wu Zhan, Yekun Xu*, Vikas Kumar

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

22 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)105-118
Number of pages14
JournalJournal of Business Research
Volume108
DOIs
Publication statusPublished - Jan 2020

Keywords

  • Institution-based view
  • Institution-fostering view
  • International friendship city (IFC) relationship
  • Outward foreign direct investment (OFDI)
  • Regional government leaders
  • Sub-national institution

Fingerprint

Dive into the research topics of 'International friendship cities, regional government leaders, and outward foreign direct investment from China'. Together they form a unique fingerprint.

Cite this