Impact of historical conflict on FDI location and performance: Japanese investment in China

• 成果类型: Article
• 署名作者: Gao, Gerald Yong; Wang, Danny Tan; Che, Yi
• 署名单位: University of Missouri System; University of Missouri Saint Louis; Hong Kong Baptist University; Shanghai Jiao Tong University
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/s41267-016-0048-6
• 发表日期: 2018
• 页码: 1060-1080
• 关键词: FDI; historical conflict; JAPANESE FIRMS; location; performance; political capital; CHINA

摘要

Historical relations between countries bring important explanatory power for foreign direct investment (FDI) decisions, yet little is known on whether a home-host country relation exhibits heterogeneous effects on FDI across the country's subnational regions. In this study, we examine the long-term impact of historical conflict on FDI location choices and performance. Using a sample of 8,646 Japanese FDI in China, we show that civilian casualties in different provinces of China during the Second Sino-Japanese War exert deterring effects on Japanese FDI location choices. Furthermore, we demonstrate that civilian casualties negatively affect Japanese FDI performance and political capital accumulation strategies, in the forms of excessive tax payment and local employment, can reduce this negative effect. This study contributes to the discussion on how within-country differences of historical factors affect FDI location decisions and performance. The findings on firms' political capital accumulation strategies also provide important implications for FDI operation in an environment characterized by historical animosity.