Adventurous Foreign Direct Investment

Michał Zdziarski , Justyna Światowiec-Szczepańska , Mike Troilo , Łukasz Małys

Abstract

Purpose: The aim of this paper is to explore the phenomenon of an advanced form of internationalization: foreign direct investment (FDI) in a distant location. We label this transaction "adventurous FDI", and explain how this new concept is related to, yet distinct from, other widely studied theories: born global companies, the LLL model, and the Uppsala model. We propose a theoretical typology of adventurous FDI based on two critical factors for risktaking: distance and embeddedness. Methodology: We present a theoretical proposal of a typology of AFDIs. To support our proposal, we illustrate the typology with examples from a longitudinal study of foreign direct investments undertaken in the years 2007-2009 by Polish frms. Selection of the time period for this study is justifed by the fact that the number of FDI transactions and AFDIs has almost doubled in the observed time period. We apply methods of social network analysis to identify embeddedness of FDIs and use geographic distance measures to classify transactions on a distance scale. Originality: Current theories of foreign direct investment (FDI) focus broadly on either gradual learning or instant globalization. We identify a new category which we term "adventurous FDI". The distinctive features of adventurous FDI includes the exploration of many unknowns related to distant locations and the use of advanced internationalization forms. We propose that embeddedness in country networks is instrumental to adventurous FDI, as the rapid learning inherent in such network arrangements enables frms to overcome the ambiguity associated with vast geographic, psychic, and cultural distance.
Author Michał Zdziarski - University of Warsaw (UW), MNiSW [80]
Michał Zdziarski,,
-
, Justyna Światowiec-Szczepańska (WZ / KZS)
Justyna Światowiec-Szczepańska,,
- Department of Strategic Management
, Mike Troilo - The University of Tulsa, USA
Mike Troilo,,
-
, Łukasz Małys (WGM / KMM)
Łukasz Małys,,
- Department of International Marketing
Journal seriesJournal of Management and Business Administration. Central Europe, [Management and Business Administration. Central Europe], ISSN 2084-3356, e-ISSN 2300-858X, [2450-7814, 2450-8829], (B 13 pkt)
Issue year2017
Vol25
No2
Pages117-138
Publication size in sheets1.05
Keywords in English internationalization, foreign direct investment, distance, social network analysis, embeddeddness
DOIDOI:10.7206/jmba.ce.2450-7814.198
URL https://mbace.eu/resources/html/article/details?id=149002
Languageen angielski
Score (nominal)13
Score sourcejournalList
ScoreMinisterial score = 13.0, 26-03-2020, ArticleFromJournal
Publication indicators WoS Citations = 1
Citation count*2 (2020-07-03)
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* presented citation count is obtained through Internet information analysis and it is close to the number calculated by the Publish or Perish system.
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